Per S.S. Kang :

The appellants made a request to decide the appeals on merits. These appeals are filed by M/s. Sheth Computers Pvt. Ltd., Shri Rajesh Rasiklal Sheth and Shri Lachhaman Das Company against the common Order-in-Original dated 26.9.1991 passed by the Collector of Central Excise. In the impugned order duty was confirmed on M/s. Sheth Computer Services P. Ltd. and penalty was imposed on Shri Rajesh R. Sheth on account of manufacture of computers which were cleared without payment of duty. The redemption fine in lieu of confiscation was imposed on Shri Lachhaman Das and Co. on a Computer which was purchased from M/s. Sheth Computer Services P. Ltd.

2. The appellant made a request to decide the appeals on merits.

3. Heard Ld. JDR and perused the appeal papers. M/s. Sheth Computer Services Pvt. Ltd. are engaged in the assembling of Computers and they were clearing these computers without payment of duty. The contention of the appellants is that they were merely assembling the Computer System and mere assembly of Computer System does not amount to assembly of Computers, therefore, no duty is payable on such Computers.

4. M/s. Lachhaman Das Co. in their appeal memo submits that they had purchased one Computer from M/s. Sheth Computer Services Pvt. Ltd. and they had no knowledge that the Computer was cleared without payment of duty. Therefore, the computer purchased by them is not liable for confiscation.

5. We find that the Tribunal in the case of Hansa Electronics (I) Pvt. Ltd. Vs. Commissioner of Central Excise, Mumbai-I, 1999 (35) RLT 23 (Cegat) held that assembling of data processing unit from duty paid parts amounts to manufacture. In the present case it is admitted by the appellants that they were assembling computer from the brought out items. This was admitted by Shri Rajesh in his statement before the Excise Officers. In view of the above mentioned position of the Tribunal, we find no merit in the appeal filed by M/s. Sheth Computer Services Pvt. Ltd.

6. A penalty of Rs. 10,000/- was imposed on Shri Rajesh Sheth under 209A of Central Excise Rules who is the Director of the appellants firm. There is no evidence on record to show that there is any malafide intention on his part to evade payment of duty hence the penalty of Rs. 10,000/- under Rule 209A of Rules on Shri Rajesh Sheth is not sustainable.

7. In the appeal filed by M/s. Lachhaman Das Co. the contention of the appellants is that they had purchased one Computer from M/s. Sheth Computers and they had no knowledge that the computer was cleared without payment of duty and they had no intention to evade payment of duty, therefore, we find that the confiscation of that computer is not justified. Therefore, the redemption fine of Rs. 35,000/- imposed on M/s. Lachhaman Das and Co. is set aside and appeal filed by M/s. Lachhaman Das Co. and Shri Rajesh Sheth are allowed and appeal filed by Sheth Computers is dismissed.