Santel Communications Pvt. Ltd. Vs Customs, Excise And Service Tax Appellate Tribunal (Madras High Court)
The Madras High Court considered Civil Miscellaneous Appeals filed by a company engaged in importing telephone instruments and parts, its Director, and its Financial Advisor against a common order of the CESTAT, Chennai, which had affirmed the Original Authority’s order. Before the High Court, the appellants restricted their challenge to the invocation of the extended period under the proviso to Section 11A(1) of the Central Excise Act, 1944, and the penalties imposed on the Director and the Financial Advisor under Rule 26 of the Central Excise Rules, 2002.
The company imported telephone instruments and parts under the Santel and TATA brands, assembled the parts into telephone instruments, packed them for retail sale, and affixed MRP labels, except for products supplied to TATA for its private telephone communication services. Following a departmental visit on 30.01.2006 and verification of records, a show cause notice dated 04.10.2006 demanded duty of Rs.60,13,236 for the periods 2001-02 to 2004-05, together with interest and penalties. After considering the company’s reply, the Original Authority held that assembling, soldering and testing of imported and indigenous telephone parts amounted to manufacture; held that labelling, relabelling and affixing or altering MRP stickers constituted manufacture on or after 01.03.2003; confirmed a duty demand of Rs.20,56,807 after adjustments; allowed adjustment of CENVAT credit of Rs.8,43,242; imposed an equivalent penalty on the company under Section 11AC; demanded interest under Section 11AB; and imposed personal penalties of Rs.1,00,000 on the Director and Rs.50,000 on the Financial Advisor under Rule 26. The CESTAT confirmed these findings, leading to the present appeals.
