Full Judgment
3. The appellants are manufacturers of Colour Television Receiver sets of different sizes and parts thereof. They used to purchase various inputs and raw materials for the purpose of manufacturing parts and final products of television receiver sets and take credit when the goods are reached in the factory and the credit so availed is being utilized for clearing the inputs or final products as the case may be.
4. M/s. PVR Infotech, Malanpur, Gwalior, are also manufacturers of television receiver sets. The said company placed purchase orders with the appellants for inputs/parts of televisions and also television sets in SKD condition for manufacturing their final products.
5. According to the purchase order, appellants cleared semi-assembled television model SV-1414 160 Nos. along with front covers of television model CT 2121 & 2120 receiver sets vide invoice No. 29747, 29748 both dated 20.12.2001 and invoice No. 29757 dated 21.12.2001 through truck No. HR-55-8776 belongs to M/s. Bafna Logistics, Aurangabad.
6. On 24.12.2001, the Preventive Wing of Central Excise, Gwalior, on an en route seized the goods along with truck on suspicion that the description shown in the invoices are not tallied with the original goods.
7. The appellants executed a bond of Rs. 20.00 lakhs and furnished bank guarantee of Rs. 5.00 lakhs and also bond of Rs. 10.00 lakhs and bank guarantee of Rs. 2.50 lakhs for release of the seized goods and vehicle. Accordingly, the seized goods and the truck were released.
8. Show Cause Notice dated 22.06.2002 was issued to the appellants, proposing demand of duty amount of Rs. 2,40,000/- for cleared goods without payment of duty. The appellants rebutted the allegations in the Show Cause Notice. The Additional Commissioner, Central Excise, Aurangabad, dropped the duty demand.
9. On filing appeal, duty is confirmed and penalty is imposed among other penalties and redemption fine.
10. It is submitted by the appellants that the goods were cleared from the factory on payment of duty with supporting documents. The seized goods were re-manufactured and cleared on payment of duty.
11. In these appeals, the question arises as to whether the goods were marketable as TV sets i.e. fully furnished TV sets is a matter of fact.
No technical facts were available before the Commissioner (Appeals) or even before us in order to say that they are not completed TV sets.
12. The Commissioner (Appeals) has decided the case on personal observation. Show Cause Notice was issued proposing penalty and confiscation of goods. The original adjudicating authority had dropped the proceedings.
13. The Commissioner (Appeals) should have given a Notice as per provision under Section 35A(3).
14. In the aforesaid circumstances, the appeal is allowed as remand to the original authority to re-decide the fine and penalty after hearing both sides. Order accordingly.