Custom, Excise & Service Tax Tribunal
(I) M/S. Karnataka Metal Company vs The Commissioner Of Customs, Central ... on 20 January, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, BANGALORE SOUTH ZONAL BENCH COURT - I Appeal No: E/1150/2009; E/2269/2010 & E/2270/2010 (Arising out of (i) Order-in-Appeal No.45/2009 (H-IV) C.E. dated 9.11.2009; & (ii) & (iii) Order-in-Appeal No:82 to 85/2010 (H-IV) C.E. dated 25.8.2010 passed by the Commissioner of Customs, Central Excise & Service Tax (Appeals-II), Hyderabad.) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether their Lordship wish to see the fair copy of the Order? Seen 4. Whether Order is to be circulated to the Departmental authorities? Yes (i) M/s. Karnataka Metal Company (ii) M/s. Karnataka Metal Company (iii) M/s. Agarvanshi Aluminium Ltd. Appellant Versus The Commissioner of Customs, Central Excise & Service Tax Hyderabad-IV Commissionerate Hyderabad. Respondent
Appearance S/Shri S. Jai Kumar & K. S. Ramesh, Advocates for the appellant.
Shri M. M. Ravi Rajendran, Deputy Commissioner (AR) for the Revenue.
CORAM SHRI P. G. CHACKO, HONBLE MEMBER (JUDICIAL) Date of Hearing: 20.1.2012 Date of decision: 20.1.2012 FINAL ORDER Nos._______________________2012 Appeal No. E/1150/2009; E/2269/2010 Karnataka Metal Company (KMC), the appellant in the first two appeals is aggrieved by penalties of Rs.50,827/- and Rs.1,06,226/- respectively imposed on them under Rule 25 of the Central Excise Rules, 2002. The finding against them is that they issued statutory invoices to another party without supply of goods with a view to enabling that party to avail CENVAT credit of the duty covered by the invoices. The challenge in the first appeal is to the effect that the CENVAT credit initially taken by the appellants customer on the basis of the relevant invoices was subsequently reversed with interest and, further, 25% of the amount of CENVAT credit was also paid by the customer within 30 days from the date of receipt of the show-cause notice. The learned counsel for the appellant has reiterated this factual position and has urged that a lenient approach be taken. In the second appeal, the role played by the appellant is identical but the appellant does not know as to whether the customer reversed the CENVAT credit initially taken.
2. I have heard the Deputy Commissioner (AR) also, who has reiterated the findings recorded by the original and first appellate authorities.
3. After considering the submissions made in the first two appeals, I have not found any case for the appellant against Rule 25 penalties.
4. In one case, the original authority imposed a penalty of Rs.50,827/- and the appellate authority affirmed it. In the other case, the original authority imposed a penalty of Rs.1,06,226/- and the appellate authority affirmed it. These penalties are equivalent to the amount of CENVAT credit which was irregularly passed on by the appellant to the customer without supply of goods. Rule 25 permits an amount equal to duty to be imposed as maximum penalty. In appropriate cases, it also enables the quasi-judicial authority to impose a lesser amount of penalty. During the period of offence, this minimum was Rs.10,000/-. Considering the facts and circumstances of this case, I am inclined to reduce the quanta of penalties in the two cases to Rs.15,000/- (Rupees Fifteen Thousand Only) and Rs.30,000/- (Rupees Thirty Thousand Only) respectively. With this modification, the impugned orders are sustained.
Appeal No. E/2270/2010
4. The third appeal is by M/s. Agarvanshi Aluminium Ltd., manufacturers of the goods mentioned in the invoice in question. The manufacturer sold the goods to one party and issued the invoice to another. For this offence, the appellant carries a penalty of Rs.43,726/- which is equal to the CENVAT credit taken by the recipient of the invoice. The position of this appellant is, by and large, identical to that of Karnataka Metal Company (KMC). After hearing both sides, therefore, I hold that the conduct of the appellant in the third appeal attracted Rule 25. The original authority imposed the above penalty on the appellant and the appellate authority maintained it. In the facts and circumstances of this case, the quantum of penalty has to be reduced to Rs.12,000/- (Rupees Twelve Thousand Only). With this modification, the impugned order stands sustained.
5. All these appeals stand disposed of.
(Pronounced and dictated in open Court) (P. G. CHACKO) Member (J) rv ??
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