J.K. Ranka, J. - (1.) INSTANT Central Excise Appeal u/s. 35G of Central Excise Act, 1944 (for short, 'CE Act') is directed against the order of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi, Principal Bench, New Delhi (for short, 'CESTAT') dt. 01/11/2010 passed in Excise Appeal No. E/427 of 2006 -Excise (Branch) and it pertains to penalty imposed u/s. 11AC of the CE Act amounting to Rs. 1,15,155/ -. The brief facts, which can be culled out on perusal of the impugned order and on the basis of the arguments advanced by counsel for the appellant, are that the appellant is engaged in the manufacturing of Oxygen Gas and Dissolved Acetylene Gas falling under Sub -Heading 2804.10 & 2901.10 respectively of Central Excise Tariff Act. The claim of the respondent -revenue is that the assessee received additional consideration from their buyers in the name of "cylinder maintenance charges' and on account of the suppression/mis -declaration of assessable value of the excisable goods, they had short paid Central Excise duty amounting to Rs. 10,13,699/ - on the clearance of excisable goods made during the period from 01/01/1997 to 31/01/2001. The above discrepancy was noticed by the audit team of AG Rajasthan that the assessee, against the sale of their excisable goods, had been receiving additional consideration from their buyers in the name of maintenance charges which was not included while computing the assessable value for the purposes of calculating Central Excise Duty. The assessee was also charging, inter alia, from their buyers, the cylinder rental charges in addition to the basic price per cubic meter for supply of gases. The goods (gases) were supplied by them in their own cylinders as well as in the buyers' cylinders. The rental charges and cylinder maintenance charges were being charged in terms of per cubic meter of gas. The rental were charged only in the cases where the gases were supplied in their own cylinders but cylinder maintenance charges were charged from all the buyers including the buyers who purchased the gases in their own cylinders. Thus, prima facie, the revenue came to the conclusion that on the basis of the special audit carried by the AG Rajasthan, the appellant had short paid Central Excise Duty to the tune of Rs. 10,13,699/ -.
(2.) THE facts on record also came to be noticed that the assessee did not disclose these facts earlier at all while filing their returns under Form RT -12 and mis -declared the excisable value in the said returns with sole intend to evade payment of Central Excise Duty on the additional sale consideration received from the buyers in the name of the maintenance charges. Though during the course of adjudication and after much persuasion, the assessee came out with the fact that it had collected the additional consideration of Rs. 36,16,511/ - in the name of maintenance and depreciation charges but insisted that these were maintenance charges. It was also noticed by the revenue authorities during the course of adjudication proceedings that addition of Acetone in Dissolved Acetylene Gas Cylinder has nothing to do with the maintenance of cylinders but it works as a compressing agent to facilitate flow -out of Dissolved Acetylene Gas from the cylinder and this fact was never revealed to the department and the assessee was not including its (i.e. Acetone's) cost in the assessable value. The adjudicating authority accordingly, on the basis of judgment rendered by the Hon'ble Delhi High Court in the case of M/s. Kota Oxygen (P.) Ltd. v. CCE : 2000 (121) ELT 369, held that the cylinder maintenance charges so also rental charges are certainly required to be included in the assessable value of the goods and in view of this decision, the assessable value for the purpose of Central Excise Duty, would also include cylinder maintenance charges and rental charges and since the provisions of section was quite clear as also supported by the judgment rendered by the Hon'ble Apex Court, the adjudicating authority came to the conclusion that the assessee suppressed the facts and accordingly, after detailed analysis and considering other facts and circumstances, not only affirmed duty of Rs. 1,18,420/ - against the appellant but also imposed penalty u/s. 11AC amounting to Rs. 1,15,155/ -.
(3.) THIS order was assailed by the appellant before the Commissioner (Appeals). The Commissioner (Appeals), after recording detailed findings, also came to the conclusion that the appellant, with a view to evade duty, suppressed the vital information of the use of Acetone as dissolving agent and accordingly approved the penalty on the appellant. It also upheld penalty in respect of maintenance charges, however, with direction to the Assessing Authority to re -work out the penalty by treating the value thereof -cum -duty price.;