Customs, Excise and Gold Tribunal - Calcutta
M/S. Indian Iron And Steel Co. Ltd vs Commissioner Of Central Excise, Bolpur on 23 January, 2001
Equivalent citations: 2001(131)ELT69(TRI-KOLKATA)
ORDER
1. Archana Wadhwa
1. All the appeals are being disposed of by a common order as they are against the same impugned order of the commissioner (Appeals).
2. The appellants have been clearing their product by showing debit entries in their PLA against insufficient balances. The duties on this account were to the tune of Rs.3.33 crores, Rs.2.50 crores, Rs.7.14 crores and Rs.61.98 lakhs in the four appeals before us respectively. Though the said duties have been paid by the appellants subsequently, the authorities below have imposed personal penalties of Rs.33.00 lakhs, Rs.25.00 lakhs, Rs.70.00 lakhs and Rs.62.00 thousand in all the four different cases. It has been observed by the Commissioner (Appeals) that it was shocking to note that their balance in PLA always remained in deficit/negative even whenever any lump-sum were deposited in the PLA. What is suprising to note is that they have been clearing dutiable excisable goods without sufficient balance in the PLA i.e. without payment of duty for months together and thus acted deliberately in defiance of law, in conscious disregard to their obligation and in utter disregard and flagrant violation of provisions of Central Excise Act and Rules. The appellants have not disputed the fact that they had been making clearances against debit balances in PLA, which have been made after a gap of more than a month. Penalty to the tune of 10% of the quantum of duty has been imposed by the authorities below. By not making the payments on account of excise duties for months together, the appellants have earned interest on the said deficit clearances, which would definitely be more than 10% of the duty quantum. It is also noted that the authorities below have observed that whereas on the one hand, the appellants were not paying any duty on their clearances, on the other hand their customers were taking Modvat credit on the duties not so paid by the appellants, but shown on the duty paying documents as having been paid.
3. Shri R.N. Das, learned advocate appearing for the appellants submits that it is not clearance of goods without payment of duty, but the clearance on deferred payment, which was made good subsequently. He also submits that the appellants were passing through a financial crunch and had difficulties arranging the finances for deposit in the PLA. There was no mala-fide on the part of the appellants and the non-intended lapse in the form and nature of making clearance under debit balance in PLA for a short span of period, should be regarded as technical lapse condonable under the low, particularly in view of the fact that no duty remained payable at the time of demand being confirmed under the Order-in-Original. He also submits that the observations made by the adjudicating authority that their customers took credit of duty before the same was paid by the appellants, is not correct, inasmuch as they were initially clearing the goods to their own depots from godowns and before further clearance from their godowns, the duty was actually paid by them. As such, by that time their customers took the MODVAT Credit, Duty stood paid by them.
4. Shri V.K.Chaturvedi, larned S.D.R. for the Revenue submits that the appellants were working under Self Removal Procedure which imposes a lot of faith on the assessees. Under the law, they are required to clear their goods on proper payment of duty. Inasmuch as there is no dispute that the appellants have been clearing their goods against the deficit balance in their PLA. For a sufficient long time, the imposition of penalties upon them, is justified and warranted.
5. We have given our careful consideration to the issue involved before us. The appellants have not contested the findings of the authorities that the clearances were being made by showing the payment from deficit/negative balance, which deficit was being made good by them subsequently. As such, at no point, there was sufficient balance in their PLA so as to cover the clearance of the goods at the time of their clearance from appellants' factory. It is not a non-time case where such deficit balance occurred on account of mistake or inadvertence on the part of the appellants. There was repeated clearance against insufficient balance in PLA for a sufficient long time . This has definitely resulted in contravention of the Central Excise Law and the appellants have invited penalty for the above contravention. However, after taking into account the fact that the appellant firm is a sick unit and is before BIFR, we reduce the quantum of personal penalties imposed by the authorities to 25% in each case. But for the above modification in the quantum of pealties, the appeals are otherwise rejected.