Per Justice K. Sreedharan :

Appellants, M/s. Mazagon Dock Ltd., is a Public Sector Undertaking. They challenge the order-in-original No. 14/91 dated 29-11-1991 whereby the adjudicating authority confirmed the demand of differential duty amounting to Rs. 1,44,53,945.00 as claimed in show cause notice dated 15-3-1990. This demand was in relation to manufacture of a jack-up rig cleared to M/s. ONGC, Bombay and delivered against gate pass No. 15 dated 13-4-1988. The adjudicating authority further imposed a penalty of Rs. 25 lakhs on the appellant under Rule 173Q of the Central Excise Rules, 1944 as well.

2. The short facts necessary for the disposal of this appeal are as follows :-

3. Oil and Natural Gas Commission placed orders with the appellant firm for the manufacture of two jack-up rigs. Terms and conditions of the transaction were contained in contract executed in February 1983. Clause 25.2 of the contract provided for the price of the rigs. Rupee content was Rs. 21.32 crores per rig and foreign exchange content came to Rs. 20.48 crores per rig. The total price per rig was fixed at Rs. 41.80 crores. It also stated that the total contract price for the two rigs is Rs. 83.60 cror