1. All these appeals are being taken together because they emanate from a common impugned order passed by the Collector of Central Excise, Vadodara. Briefly stated the facts are as follows:- 1.1. M/s. LMP Precision Engineering Co. Ltd. is having two units at Mahadevnagar and at Aritalia Billimora in Gujarat. There is another Private Limited Company by the name and style of LMP Drilling and Mining Equipment (P) Ltd. Directors of the aforesaid two companies are the same, namely - These two companies are manufacturing drilling rigs and parts thereof.
Apart from the aforesaid two Private Limited Companies there are two partnership firms, namely (i) Bharat Iron Works and (ii) Kisan Enterprises. Partners in the said two firms are the same four brothers, as mentioned above, which are also the Directors in the two Private Limited Companies.
1.2. LMP Precision Engg. Co. Ltd. came in existence in 1969. LMP Drilling and Mining Equipment (P) Ltd. came into existence in 1979. The two partnership firms, namely, Bharat Iron Works came into existence in 1985 and the other partnership firm, Kisan Enterprises was floated in 1977.
(1) Whether water well drilling rigs mounted on motor vehicle chassis fall under Tariff Heading 84.30 as claimed by the two Private Limited Companies, as aforesaid or under Tariff Heading 87.05, as upheld by the adjudicating authority.
(2) Whether the demand of duty on account of classification upheld by the Collector is time barred or not.
(3) Whether the three manufacturers, namely (i) LMP Drilling and Mining Equipment (P) Ltd., (ii) Bharat Iron Works and (iii) Kisan Enterprises are so associated with LMP Precision Engg. Co. Ltd. that the clearances of the former three manufacturers can be combined with the clearances of LMP Precision Engg. Co. Ltd. If it is so held, the former three manufacturers would not be entitled to the benefit of Notification 175/86 which they had been availing since LMP Precision Engg. Co. Ltd. is a concern which is not entitled to the said notification on the basis of its aggregate clearances.
(4) Another related issue arising out of clubbing of clearances is whether the MODVAT Credit availed of by LMP Precision Engg. Co. Ltd. on its purchases from the other three units of duty paid inputs, would be available to LMP Precision Engg. Co. Ltd. or not.
(5) Next issue is whether the penalties under the facts and circumstances in this case are warranted on the companies and firms as well as on its Directors and Partners, as upheld by the adjudicating authority.
(6) Whether there has been evasion of duty in respect of specific instances of clearances which we shall deal it in the end.
2. Now we take up the issues seriatim. So far as the first issue is concerned, allegation and finding of the department is that both LMP Precision Engg. Co. Ltd. and LMP Drilling & Mining Equipment (P) Ltd. have described the goods manufactured by them in their classification list as follows:-Sl.
Description of Goods Chapter/HeadingNo. and Sub-Heading(1) (2) (3)1.
Other moving, grading, levelling, scraping, excavating, Ch. 84 tamping, compacting, extracting or boring machinery for earth, minerals or ores, pile drivers and pile 1. Director rotary DR 500 to DR 3500 Heading No. 84.302.
Parts suitable for use solely or principally with the Heading No. 84.31 machinery for heading No. 84.25 to 84.30 Sub-Heading No.8431.00.
2.1. It has been further held that the drawings and the invoices withdrawn from the two companies give the full description of the goods clearly showing that the drilling rigs are mounted on heavy duty motor vehicle chassis. For example, in invoice No. R-244/PR-107/87-88 dated 30-9-1987 of LMP Precision Engineering Co. Ltd. description of the goods is given as:- "1(a) PRECISION Model RBH-6-1000 Mark VI Self, propelled self contained Diesel driven Rotary Blast Hole Drill mounted on heavy duty crawler truck chassis suitable for 8 mtrs. Single pass drilling system complete with scope of supply as 4 nos. 5" OD-8 Mts. long external flush drill rold and complete as per order RIG Sr. No. BH-109/87".
2.2. Similarly full description is found to have been given in the contracts entered into by the two companies with their customers.
2.3. It has also been observed that prior to 28-2-1986 drilling rigs were classified under Tariff Item 68 CET but w.e.f. 28-2-1986 under the new Tariff these were classified under Tariff Heading 8430.00 but drilling rigs mounted on motor vehicle chassis are classifiable, according to the adjudicating authority under Tariff Heading 8705.00.
Goods falling under Tariff Heading 84.30 carry a rate of duty of 15% ad valorem whereas the goods falling under Tariff Heading 87.05 carry a rate of duty at 25% ad valorem. It has thus been held that a wilful suppression of the correct description of the goods in the classification list by the two companies has led to evasion of duty to the tune of Rs. 92,12,477/ (BED) for the period 1-3-1986 to 30-6-1988.
Show cause notice for the same was issued on 31-12-1988 to various companies/firms, as aforesaid and persons.
3.1. Drilling rigs basically consist of some main components such as hoisting system, meet, draw works, rotary table, transmission gear box, pull down system, mud pump, hydraulic system and truck chassis, crawler tractor, skid, power-take-off device etc.
3.2. He also highlighted the process of manufacture of mounted drilling rigs on a motor vehicle chassis which is as follows:- "that, the configuration of component, changes from model to model and they are based on the specifications given by the buyer; that the choice of mounting is also given to the buyer and the. mounting could either be on the skids, trucks, crawler tracks or trailer; that the customers requires the machine mounted skid, the assessee manufacture the complete machines including the skid and then comlete skid mounted drilling rig is supplied to the buyers; that where the buyers placed an order for the rigs mounted on truck or trailor, truck chassis is purchased from the truck manufacturers either by the assessee or in some cases by the buyers and supply the trucks to the assessee. In such cases, the chassis brought into the factory is altered by including certain parts specifically designed for integrating the chassis with the drilling rigs. Besides these, certain other structural alterations are carried out on the chassis so as to make the entire unit a complete integrated unit; that the unit is run by power which is supplied by the truck engine through the propeller shaft; they manufactures the power take off device which transfers the power from the truck engine to the machine; that the power to the unit is regulated from the drivers cabin and the speed can be increased or decreased through the accelerator; that for stopping the entire unit, the engine has to be started from the drivers cabin and thereafter the power flows through the power take off device which is installed by them by cutting the propeller shaft of the truck chassis.
They further submitted that after the truck chassis is received, various alterations have to be done to the truck chassis and it has to be modified by cutting the length of the chassis so as to match the measurement of the machine manufactured by them, that after cutting the length and altering the propeller shaft and installing the power take off device, various other parts which have been assembled in the form of drilling frame are clamped the truck chassis using U Clamp - The entire unit including the truck chassis, is known in commercial parlance as drilling rig. Once a complete unit is assembled, it is not possible to use the truck chassis as such by merely dislodging the components since it has already undergone major substantial changes so as to make it fit only for use alongwith components parts as a complete drilling rig." 3.3. He has also highlighted the following important technical aspects of the matter:- "(a) The components of drilling rigs are not necessarily fitted/mounted on a truck chassis. The drilling rig components are mounted either on a truck chassis or trailor or skid, or crawler.
(b) The use of truck chassis is for the sole purpose of imparting mobility to the drilling rigs. Thus, it is obvious that the drilling rig is required for digging the earth etc. and for this purpose, it has to be shifted from place to place, for this shifting, the chassis is used.
(c) The truck chassis after receipt in factory requires to be modified substantially by cutting down its length, modifying the propeller shaft etc. The power from the engine of the chassis is also required to be transmitted to the drilling rig for the purpose of digging. This modification of the truck chassis is so substantial that after this modification and mounting of the drilling rig thereon, the truck chassis cannot be separated and used as a truck chassis again.
(d) The functional capacity and essential characteristics of the drilling machine as a whole is attributable solely to the drilling rig and not to the truck chassis. The said product is recognised and serves its purpose as a boring machinery and not as a vehicle that, in view of the above technical facts, it is obvious that the said product merits classification under Heading 84.30, as a machinery and not as a vehicle." 3.4. Our attention has further been drawn to HSN Explanatory Notes pertaining to Tariff Headings 87.05 and 84.30. Relevant extracts from Explanatory Notes under Heading 87.05 are given below:- (8) Mobile drilling derricks (i.e. lorries fitted with a derrick assembly, winches and other appliances for drilling, etc.
It should be noted that to be classified in this heading, a vehicle comprising lifting or handling machinery, earth levelling, excavating or boring machinery, etc. must form what is in fact an essentially complete motor vehicle chassis or lorry in that it comprises at least the following mechanical features: propelling engine, gear box and controls for gear changing, and steering and braking facilities.
On the other hand, self-propelled machine (e.g. cranes, excavators in which one or more of the propelling or central elements referred to above are located in the cab of a working machine mounted on a wheeled or track laying chassis, whether or not the whole can be driven on the road under its own power, remain classified in, for example, heading 84.26, 84.29, 84.30.
Similarly, this heading excludes self-propelled wheeled machines in which the chassis and the working machine are specially designed for each other and form an integral mechanical unit (e.g. self-propelled motor graders), in this case, the machine is not simply mounted on a motor vehicle chassis, but is completely integrated with a chassis this cannot be used for other purposes and may incorporate the essential automobile features referred to above." Relevant extracts from Explanatory Notes of HSN under Heading 84.30 are also reproduced below:- In general, the heading covers not only fixed or stationary machines, but (with certain exceptions referred to below concerning machines mounted on transport equipment of the type falling in Section XVII) also mobile machines, whether or not self-propelled.
Excavating, etc. machines are classified in heading 86.04 if they are mounted on wagons or trucks, of a kind suitable for coupling into a train running on a railway network of any gauge. Railroad ballast excavator screening machines are often mounted on wagons or trucks complying with this condition. On the other hand, excavating, etc., machines mounted on trucks or platforms not meeting the specifications of true railway rolling stock remain classified in this heading. Selfpropelled vehicles for the servicing and maintenance of railway tracks also fall in heading 86.04.
Certain working parts (e.g. levelling blades) of the machines of this heading may be mounted on tractors which are constructed essentially for hauling or pushing another vehicle, appliance or load but, like agricultural tractors, are fitted with simple devices for operating the working tools. Such working tools are subsidiary equipment for occasional work. In general, they are relatively light and can be mounted or changed at the working site by the user himself. In such cases, the working tools remain in this heading provided they constitute machines of this heading, or in heading 84.31 if they are parts of those machines, even if presented with the tractor (whether or not mounted thereon), while the tractor with its operating equipment is classified separately in heading 87.01.
On the other hand, this heading covers self-propelled machines in which the propelling base, the operating controls, the working tools and their actuating equipment are specially designed for fitting together to form an integral mechanical unit. This applies, for example to a propelling base resembling a tractor, but specially designed, constructed or reinforced to form an integral part of a machine performing one or more of the functions mentioned in this heading (excavating, levelling etc). Presented separately, such propelling bases also full in this heading, as incomplete machines having the essential features of complete machines of the same kind.
Propelling basis potentially classifiable in several of the headings 84.25 to 84.30 because they can be equipped with several different working parts, are classified in accordance with Note 3 to Section XVI or by application of Interpretative Rule 3(c).
For more detailed criteria for distinguishing between the tractors of heading 87.01 and the propelling bases of this Chapter see Explanatory Note 87.01.
Certain machines of the heading (e.g. pile-drivers, oil well drilling machines) are often mounted on what is in fact an essentially complete automobile chassis or lorry in that it comprises at least the following mechanical features, propelling engine, gear-box and controls for gearchanging, and steering and braking facilities. Such assemblies are classified in heading 87.05 as special purpose motor vehicles.
On the other hand, this heading includes self-propelled machines in which one or more of the propelling or control elements referred to above are located in the cab of a machine mounted on a wheeled chassis, whether or not the whole can be driven on the road under its own power.
The heading further includes self-propelled wheeled machines in which the chassis and the working machine are specially designed for each other and form an integral mechanical unit. In this case, the machine is not simply mounted an automobile chassis like the machines described in the first paragraph above, but is completely integrated with a chassis that cannot be used for purposes and may incorporate the essential automobile features referred to above." 3.5. Learned advocate has submitted that the adjudicating authority while relying on the HSN Explanatory Notes has not referred to the full Explanatory Notes under Tariff Heading 84.30 while arriving at its finding that the goods under consideration are classifiable under Tariff Heading 87.05. He has submitted that in view of the process of manufacture and the fact that the chassis is fully integrated drilling rig as described in the process of manufacture, the goods would be classifiable under Tariff Heading 84.30. He relies in support of his proposition on Tribunal's judgment reported in 1990 (46) E.L.T. 49 [Mineral Exploration Corpn. Ltd v. C.C.] which is in respect of vehicles mounted drilling equipment held to be classifiable under Tariff Heading 84.23 of the Customs Tariff Act, 1975, as it stood before 28-2-1986 and not as a special purpose vehicle under Heading 87.03, as contended by the department.
3.6. Learned JCDR, Shri S. Kak, for the Revenue while reiterating the findings of the adjudicating authority, as aforesaid, has pointed out that pamphlet available in the Paper Book and showing DR 1000 (Direct Circulation Rotary Drilling Rig) does not indicate that there has been cutting of motor vehicle chassis, as contended by the learned advocate for the appellants. He also points out that the gate pass clearly indicates that these are motor vehicle chassis. For example, in G.P. 1 No. 25 dated 24-8-1983 it is clearly mentioned "Precision Model DR 1500 Rig mounted on truck chassis with tools and ACC". It is an admitted position that there has been no change in manufacturing process as it was before 28-2-1986 or after 28-2-1986\ He further draws attention to para 10 of Acceptance of Tender No. ME-2/220/556/6-10-1983 available at page 75 of the Paper Book which gives the particulars mounting and prime mover. This para reads as follows:- All the components of the drill including Air Compressor and Mud Pump shall be mounted on ASHOK LEYLAND 6 x 4 drive 'HIPPO' Truck Chassis. Other items shall be mounted on an auxiliary Ashok Leyland Tuskar Chassis.
The Air Compressor shall have it's own separate Diesel Engine, while all other components of the drill shall be driven by same truck engine through a Power-Take-Off Device." 3.7. In view of the aforesaid specifications, he submits that it is apparent that full motor vehicle chassis are used by the appellants and the drilling rig is mounted thereon. He has also drawn attention to an order placed by Chief Public Health Engineer, Government of Assam dated 31-3-1986, para 23 of which shows that there is a separate power source as indicated below:- "23. Generating set of capacity 1KVA, 220 Volts, 50 Cycles/second, A.C. single phase powered by KIRLOSKAR" make KA-27 type single cylinder, vertical 4-stroke air cooled diesel engine developing 415 BHP at 3000 RPM as per BS649/1958." It is, therefore, the submission of the learned JCDR that the power source of drilling rig and the motor vehicle chassis are different and it is not the engine of motor vehicle chassis which is the power source of the drilling rig. In these facts and circumstances, he submits that classification under Tariff Heading 87.05 has been correctly made by the adjudicating authority.
4. In his rejoinder, Shri Manoj Arora, learned advocate for the appellants has urged that the manufacturing process indicated by the appellants has not been rebutted by the adjudicating authority. They are manufacturing power-take-off Device which supplies the power from the engine of the motor vehicle chassis to the drilling rig, thus completely integrating the chassis and the drilling rig. Power source referred to at para 23 in the order placed by the Chief Public Health Engineer, Government of Assam and pointed out by the learned JCDR is only a small alternative arrangement for the purpose of lighting and not for the purpose of working the drilling rig.
5. We have carefully considered the pleas advanced on both sides. We observe that the adjudicating authority has relied only on the following portion of HSN Explanatory Notes under Chapter Heading 84.30:- "(c) Explanatory note of Chapter heading 84.30 '(2) Machines mounted on automobile chassis or lorries. Certain machines of this heading (e.g. piledrivers, oil well drilling machines are often mounted on what is in fact an essentially complete automobile chassis or lorry in that it comprises of least the following mechanical features : propelling engine, gear-box and controls for gear changing and steering and braking facilities. Such assemblies are classified in heading 87.05 as special purpose motor vehicles." and has not taken into consideration the complete Explanatory Notes both under Chapter Headings 87.05 and 84.30 which have already been set out above. Manufacturing process, as pointed out by the learned advocate, has been fully set out in the impugned order at page 27 thereof. This process of manufacture has not been rebutted, as rightly pointed out by the learned advocate. Manufacture of specific power-take-off device by the appellants has also not been denied by the adjudicating authority. In the aforesaid facts and circumstances, we agree with the learned advocate for the appellants that the motor vehicle chassis on which the drilling rig is mounted are so integrated that the chassis cannot be separately used as a motor vehicle.
Therefore, we hold that the goods are correctly classifiable under Chapter Heading 84.30. Classification under Chapter Heading 87.05, as made by the adjudicating authority is not correct.
6. In view of the aforesaid finding, demand of duty for Rs. 92,12,477.00 (BED) for the period 1-3-1986 to 30-6-1988 would not be leviable upon the appellants.
7. Coming to the second issue now i.e. the demand of the aforesaid duty being time barred, in view of our finding above, this issue acquires only an academic interest because the demand itself is not sustainable on the question of classification; nevertheless, we are of the view that the demand is time barred. The adjudicating authority's finding to the effect that non-declaration of full description of the goods in the classification list is wilful mis-statement or suppression of fact and with a view to evade payment of duty is not correct in view of full description of the goods being available in the gate passes, price lists, contracts submitted with the price lists, invoices, as not rebutted by the adjudicating authority on the defence taken by the appellants. Their detailed defence has been set out in paras 11.7 and 11.8 of the adjudication order. We, therefore, hold that the demands are also time barred and it cannot be said that there was any wilfulness in not making full description of the goods in the classification list as shown in other documents.
8. On the next issue of clubbing of clearances of the three concerns, namely, two partnership firms - Kisan Enterprises, Bharat Iron Works and LMP Drilling and Mining Equipment (P) Ltd., with that of the aggregate clearances of LMP Precision Engineering Co. Pvt. Ltd., we find that the sum and substance of a very long order of the adjudicating authority is that the brothers namely, C.L. Mistry, M.L.
Mistry, Jayantilal Lallubhai Mistry and Chandrakantbhai Lallubhai Mistry are controlling all the 4 units. Two companies are controlled by them as Directors and the two partnership firms are controlled by them as partners of the firms. It is further based on the following findings:- (1) Free flow of funds between associated units and the main unit LMP Precision Engineering Co.
(2) There is mutuality of interest both financially and managerial between the main unit and the other.
The adjudicating authority has also held that it is necessary to lift the corporate veil of the main unit to disclose their true identity.
The adjudication order goes on to set out extensive extracts of case law on the subject of lifting the corporate veil or following the principle laid down in McDowell's case by the Supreme Court that avoidance of tax should not be encouraged [(1985) 154 ITR 148] but the impugned order does not bring out the cogent basis on which the corporate veil should be lifted. The evidence brought on record gives certain stray instances of the advances given by one company or the firm to another. Inter company advances or advances from one company to another partnership are quite normal and commercial one so long as they are proper and reflected in the accounts. There is no averment in the adjudication order that there has been any clandestine flow of funds between the so-called associated firms and companies and the main company LMP Precision Engineering Co. Pvt. Ltd. 9. We are of the view that the examples given by the adjudicating authority in the impugned order are normal transactions between two commercial concerns. Simply because the Directors of the two companies are the same as the partners of the two partnership firms, it cannot be said that the LMP Precision is the main unit controlling the other three units, namely, LMP Drilling & Mining Equipment (P) Ltd., Bharat Iron Works and Kisan Enterprises. LMP Precision Engg. Co. is a private limited company incorporated under the Companies Act. This company thus have a separate legal entity. Directors are merely employees of a company. It has not been brought on record that production in any of these associated units is under the supervision and control of the main unit LMP Precision Engg. Co. There is not even a whisper of such an arrangement in the working and functioning of the said units.
9.1 Concept of clubbing the production of two manufacturing units arises when the two units are considered to be the one and the same manufacturer or the production in one unit is "by or on behalf" of the other. The circumstances in which clubbing should be resorted to is well illustrated by a judgment of Allahabad High Court in the case of Phillips India Ltd. v. UOI and Ors. [1980 (6) E.L.T. 263]. Para 10 of the said judgment is reproduced below:- "10. In a case where a company requiring certain goods places orders for manufacturing articles according to its requirements, such a company cannot be said to have hired any labour and also does not have any control over the working of the manufacturing concern, hence such a company will not be considered to be a 'manufacturer' within the definition of the term given in Section 2(f) of the Act.
A person placing orders for manufacturing of articles would only be a buyer and thus cannot be the manufacturer. Simply because the goods manufactured in accordance with the requirements of the buyer, complying with his standard, the same would not make him a manufacturer inasmuch as such a person does not engage himself either in manufacture or production of goods on his own account. He does not incur any financial involvement needed for manufacturing or producing the goods and also does not have any control or supervision over the manufacturing process. Manufacturing company was not a dummy company nor a buyer placing orders for its manufacturing could be considered to be a manufacturer. It is only if those who own a factory are a dummy concern or a camouflage for the buyer of goods produced, that the latter can be considered to be a manufacturer. [Emphasis supplied].
There is no finding in the impugned order to the aforesaid effect that the three units are dummies or facade for LMP Precision Engg. Co.
Another incorrect approach adopted by the adjudicating authority on the aspect of clubbing is a confusion regarding the concept of 'related person' under Section 4 with that of clubbing. Relying on Delhi High Court's decision in the case of Straw Products Ltd. and Anr. [1987 (30) E.L.T. 275 (Del.)] in the context of definition of 'related person' under Section 4, the adjudicating authority has held that the goods cleared by LMP Drilling & Mining Equipment (P) Ltd., Bharat Iron Works and Kisan Enterprises should be clubbed with the clearances of LMP Precision Engg. Co. Concept of 'related person' under Section 4 does not mean that the two persons are one and the same or that one is manufacturing on behalf of the other. The definition of 'related person' under Section 4 is purely for the purpose of determining the valuation of goods for the purposes of assessment to duty. That definition cannot be applied for the purpose of treating the two 'related persons' as being the same manufacturer or one manufacturing on behalf of the other so as to enable the department to club the clearances of the four manufacturers. Accordingly clubbing of clearances of the 4 manufacturers is set aside.
9.2 On the basis of the aforesaid finding the 4th issue regarding availing of MODVAT Credit by LMP Precision Engg. Co. has also to be decided in their favour since the credit has been correctly taken by them and it was sought to be denied merely on the ground that the clearances of the three associated units are clubbed with that of LMP Precision Engg. Co. Hence the demand of duty to the extent of Rs. 37,24,743.20 p ordered to be recovered as wrongful MODVAT Credit availed of by LMP Precision Engg. Co. is not held to be recoverable.
9.3 We find that the appellants, LMP Precision Engg. Co. in their appeal memo have not rebutted the allegation and finding regarding evasion of duty by not including the value of truck chassis and assembly charges in the value of the goods to the tune of Rs. 4,14,122.05 and Rs. 3,32,459.00 confirmed by the adjudicating authority. These findings are upheld subject to any modification regarding the quantum of differential duty payable by the appellants on account of upholding of the classification of the goods under Heading 84.30.
9.4 It is also observed that LMP Precision Engg. Co. in their appeal memo has not rebutted the differential duty to the tune of Rs. 4,77,402.00 held to be payable by the adjudicating authority in para 25 to 25.2 of the adjudication order. This is on account of modification of the chassis from crawler chassis to truck chassis. Demand of duty on this account is also confirmed against the appellants in the absence of any defence taken by them on this finding of the adjudicating authority subject to modification in the quantum of duty payable by them on account of upholding the classification of the goods under Tariff Heading 84.30.
9.5 On the basis of the aforesaid findings in respect of classification the demand of duty to the tune of Rs. 7,26,008.00 for the period 1-3-1986 to 29-2-1988 against LMP Drilling and Equipment (P) Ltd., held to be recoverable, is set aside.
9.6 In the absence of any defence taken by LMP Drilling and Mining Equipment (P) Ltd. on demand of Rs. 3,32,458.84 p by not including the value of truck chassis and mounting charges is confirmed subject to modification in the quantum of duty on account of their classification under Tariff Heading 84.30.
9.7 Demand of duty against LMP Drilling and Mining Equipment (P) Ltd. to the tune of Rs. 25,52,881.20 by denying the benefit of Notification 175/86 on account of clubbing with the clearances of LMP Precision Engg. Co. is set aside in view of our aforesaid finding.
9.8 Demand of duty against Bharat Iron Works to the tune of Rs. 12,57,869.23p on account of clubbing their clearances with that of LMP Precision and denying the benefit of Notification 175/86 is set aside.
9.9 Similarly, demand of duty against M/s. Kisan Enterprises to the tune of Rs. 16,17,548.00 on account of clubbing their clearances with LMP Precision Engg. Co. and thereby denying the benefit of Notification 175/86 is set aside.
10. In view of the aforesaid findings, penalty on LMP Precision Engg.
Co. is reduced to Rs. 1,00,000/- (Rupees ones lakh only) from Rs. 50,00,000/- in view of the finding of evasion of duty against them to the aforesaid extent. Similarly a penalty against LMP Drilling & Mining Equipment is reduced from Rs. 7,50,000/- to Rs. 25,000/- (Rupees twenty five thousand only).
10.1. Penalties imposed on Bharat Iron Works and Kisan Enterprises and the four individuals are set aside.
11. Lastly, the order of confiscation of land, building, plant and machinery of the four units is set aside and consequently, the redemption fines imposed on them in lieu of confiscation are set aside.