1. These two appeals filed by M/s. BNK Engine Parts (P) Ltd. and M/s.
Pilot Liners Pvt. Ltd. involve a common question of law and hence both these appeals are taken up together for disposal. Appellants have challenged the imposition of penalty only and are not contesting the duty demanded from them.
2. Shri A. Vijayaraghavan, learned Consultant for the appellants while reiterating the grounds taken in the appeal memoranda submitted that it was on the basis of the cost construction given by the appellants along with the price list, that the department came to know about the methodology adopted by them in arriving at the cost of the goods viz.
Cylinder liners falling under Chapter 8409 for M/s. India Pistons Ltd., Chennai on job work basis availing Modvat facility. He has further submitted that the appellant have not committed any of the offence of the nature mentioned under Rules 173Q(1)(a), (b), (c) and (d) of the C.E. Rules, 1944 and therefore, no penalty can be imposed on the appellants. He submitted that it was a case of interpretation of the value based on understanding of the assessee that less assessable value was shown in the price list which was supported by cost sheet submitted by them. In this connection he invited my attention to the judgment of the, CEGAT Delhi in the case of Electrolux Kelvinator Ltd. v. CCE, Jaipur reported in [2001 (47) RLT 399] wherein it has been held that penalty under Rule 173Q is not justified in a case involving short levy on account of interpretation of Section 4 of the CEA, 1944 for determination of assessable value. He also invited my attention to the decision of the CEGAT, New Delhi-A Bench in the case of Samtel India Ltd. v. CCE, Jaipur reported in [2001 (78) ECC 528] in which it has been held that no penalty under Rule 173Q was imposable in that case as the issue involved was only interpretation of Section 4(4)(d)(ii) of the CEA, 1944. He also relied upon the decision of the CEGAT A-bench, New Delhi in the case of Punjab Worsted Spg. Mills v. CCE, Chandigarh reported in [2001 (78) ECC 537] where in it has been held that no penalty was imposable as the assessable value which was earlier provisional was being finalised since the issue involved was interpretation and the penalty imposed was set aside. He further relied upon the decision of CEGAT, Kolkata Bench in the case of Goenka Woollen Mills Ltd. v. CCE, Shillong reported in [2001 (44) RLT 308] wherein penalty imposed under Rule 173Q was set aside as the issue related to bona fide dispute about interpretation of exemption notification. In view of the above decisions, he submitted that no penalty was imposable on the appellants and he prayed for setting aside the imposition of penalty by the original authority and confirmed in appeals by the lower appellate authority.
4. I have gone through the whole case and I am of the considered opinion that it was a case of interpretation of the provisions of Section 4 of the CEA, 1944 and the appellants had given cost sheet along with price list and there was no allegation of any suppression on any facts from the department. Similar issue has been dealt with by various co-ordinate Benches of the CEGAT on interpretation of the statute and it was held that where there was difference of opinion between the assessee and the department on interpretation, no penalty can be imposed. The appellants have also submitted that the offence was not of the nature mentioned under Rules 173Q(1)(a), (b), (c) and (d) of the Rules ibid and the appellants have not contested the duty demanded from them. Therefore, respectfully following the decision of the co-ordinate Benches of the Tribunal, in the case of Electrolux Kelvinator Ltd. v. CCE, Jaipur, Samtel India Ltd. v. CCE, Jaipur, Punjab Worsted Spg. Mills v. CCE, Chandigarh, andGoenka Woollen Mills v. CCE, Shillong (supra), I set aside the penalty of Rs. 2,00,000/- imposed on appellants M/s. BNK Engine Parts Pvt. Ltd. and so also the penalty of Rs. 2,50,000/- imposed on appellants M/s. Pilot Liners Pvt. Ltd. Except for the above modifications, the appeals are otherwise dismissed.