COMMISSIONER OF CENTRAL EXISE DELHI Vs. ACTION CONSTRUCTION EQUIPMENT P LTD
LAWS(SC)-2006-7-135
SUPREME COURT OF INDIA
Decided on July 19,2006

COMMISSIONER OF CENTRAL EXCISE, DELHI Appellant
VERSUS
ACTION CONSTRUCTION EQUIPMENT (P) LTD. Respondents




JUDGEMENT

- (1.)This civil appeal is filed under Section 35L(b) of Central Excise Act, 1944 against the order dated 16.6.2004 passed by the Customs, Excise & Service Tax Appellate Tribunal (for short "the CESTAT"), New Delhi in Appeal No. E/3857/03-NB(A) dismissing the appeal filed by the appellant herein.
(2.)The question involved in this civil appeal concerns computation of assessable value of mobile cranes under Section 4(4)(d) of the Central Excise Act, 1944 (for short "the 1944 Act") as it stood at the relevant time, prior to the year 2000.
(3.)The facts arising in this appeal are as follows:
The assessee (respondent) floated a non-functional dummy unit in the name of ACE Industries to evade excise duty on the mobile cranes being manufactured by it. The cranes were first assembled in the premises of the assessee and then dismantled into semi-knocked down condition for re-assembly. The same were cleared without payment of duty by wrongly availing the benefit of exemption available to small scale units in the name of ACE Industries. The assessee had manufactured three cranes valued at Rs. 26, 63, 400/- involving excise duty of Rs. 4, 10, 144/-. By a show cause notice dated 3.11.1999, the Additional Commissioner of Central Excise, Faridabad called upon the assessee to show cause why the mobile cranes should not be confiscated under Rule 173Q of the Central Excise Rules, 1944. He also demanded excise duty of Rs.4, 10, 144/- and penalty. The assessee replied to the show cause notice. The assessee denied that ACE Industries was a dummy unit as alleged by the department. Thereafter, a team of officers from the department visited the premises of ACE Industries. On verification of the records, the department found that ACE Industries was a division of the assessee and that division was dealing in spare parts of the mobile cranes. The department further found that no manufacturing activity took place at the premises of ACE Industries. On 11.6.1999 the proprietor of ACE Industries was examined. His statement under Section 14 of the 1944 Act was recorded in which he confessed that no manufacturing activity was being undertaken at the premises occupied by ACE Industries, and that the entire set up was a devise to evade duty and, at the same time, to avail of the benefit of exemption notification no. 8/99 dated 28.2.1999. He further confessed that the mobile cranes in question were actually manufactured by the assessee and not by ACE Industries.



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