M/S. Climate Systems India Ltd. Vs. Cce, Jaipur-i - Court Judgment

Excerpt:
1. in this appeal filed by m/s. climate systems india ltd., the matter relates to the imposition of penalty of rs. 4,36,000/- under rule 173 q of the central excise rules, 1944. the allegations against the appellants were that when they supplied their goods to the customers, there was a price escalation clause. the goods involved were mechanically assembled aluminum radiators and their customers were m/s.maruti udyog. in consequence of the price escalation clause, they got extra amounts but did not declare the same to the department. they deposited the amount on varying dates from september, 1994 to march, 1995. the major portion of the amount was deposited on 23.12.94 while the goods were supplied during the period april, 1993 to october, 1994.2. shri v.m. verma, advocate submits that the appellants were not required to disclose the details of the price escalation clause. there was no malafide and the amount was deposited when the requirement was made by the department. the amount has been deposited before the issuance of the show cause notices. he submits that there was no ground for imposition of penalty. he has not contested the duty liability.3. shri mewa singh, sdr submits that when there was a price variation clause, it was incumbent on the assessee to disclose the same to the department and the duty liability should have been calculated on the basis of the actual price obtained from the customers.4. after hearing both the sides and going through the facts on record, we do not agree with the contention of the appellants that when there was a price escalation clause, it was not incumbent on the part of the assessee to disclose the same. we consider that the actual price at which the goods were sold, should have formed the basis of assessment.we however, take note of the fact that the appellants had deposited the amount of duty even before the issue of the show cause notices.5. taking into account all the facts and circumstances of the case and the conduct of the assessee in depositing the amount before the issue of the show cause notices, we reduce the amount of penalty from rs. 4,36,000/- to rs. 1, 00,000/- (rupees one lakh only). subject to above, the rest part of the order is confirmed.6. shri v.m. verma, advocate at this state submits that in compliance of the tribunal's stay order dated 1.3.2001, the appellants have already deposited a sum of rs. 1,00,000/- (rupees one lakh only) towards penalty. he also submits that no further demand thus, rests with the appellants.8. the ld. advocate further submits that the interest amount be also waived.9. accordingly, we waive the payment of interest under section 11 ab of the act. the amount of rs. 1,00,000/- already deposited will be adjusted against the amount of penalty now fixed in this order. ordered accordingly.

Judgment:
1. In this appeal filed by M/s. Climate Systems India Ltd., the matter relates to the imposition of penalty of Rs. 4,36,000/- under Rule 173 Q of the Central Excise Rules, 1944. The allegations against the appellants were that when they supplied their goods to the customers, there was a Price Escalation Clause. The goods involved were mechanically assembled aluminum radiators and their customers were M/s.

Maruti Udyog. In consequence of the Price Escalation Clause, they got extra amounts but did not declare the same to the department. They deposited the amount on varying dates from September, 1994 to March, 1995. The major portion of the amount was deposited on 23.12.94 while the goods were supplied during the period April, 1993 to October, 1994.

2. Shri V.M. Verma, Advocate submits that the appellants were not required to disclose the details of the Price Escalation Clause. There was no malafide and the amount was deposited when the requirement was made by the Department. The amount has been deposited before the issuance of the show cause notices. He submits that there was no ground for imposition of penalty. He has not contested the duty liability.

3. Shri Mewa Singh, SDR submits that when there was a Price Variation Clause, it was incumbent on the assessee to disclose the same to the Department and the duty liability should have been calculated on the basis of the actual price obtained from the customers.

4. After hearing both the sides and going through the facts on record, we do not agree with the contention of the appellants that when there was a Price Escalation Clause, it was not incumbent on the part of the assessee to disclose the same. We consider that the actual price at which the goods were sold, should have formed the basis of assessment.

We however, take note of the fact that the appellants had deposited the amount of duty even before the issue of the show cause notices.

5. Taking into account all the facts and circumstances of the case and the conduct of the assessee in depositing the amount before the issue of the show cause notices, we reduce the amount of penalty from Rs. 4,36,000/- to Rs. 1, 00,000/- (Rupees One Lakh Only). Subject to above, the rest part of the order is confirmed.

6. Shri V.M. Verma, Advocate at this state submits that in compliance of the Tribunal's Stay Order dated 1.3.2001, the appellants have already deposited a sum of Rs. 1,00,000/- (Rupees One lakh only) towards penalty. He also submits that no further demand thus, rests with the appellants.

8. The ld. Advocate further submits that the interest amount be also waived.

9. Accordingly, we waive the payment of interest under Section 11 AB of the Act. The amount of Rs. 1,00,000/- already deposited will be adjusted against the amount of penalty now fixed in this order. Ordered accordingly.