Custom, Excise & Service Tax Tribunal
Cce,Ludhiana vs Nota Tex Mechanical Engg on 4 March, 2013
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
COURT NO. III
Appeal No. : E/1172/2005-EX [DB]
E/1173/2005-EX[DB]
[Arising out of Order-In-Appeal No. 658-660/CE/Appl/Ldh/04, dated 27.12.04 passed by CCE,Ludhiana]
For approval and signature:
Honble Ms. Archana Wadhwa, Judicial Member
Hon'ble Mr. Sahab Singh, Technical Member
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?
No
3
Whether Their Lordships wish to see the fair copy of the Order?
Seen
4
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE,Ludhiana Appellant
Vs.
Nota Industrial Corpn.,
Nota Tex Mechanical Engg. Respondents
Coram: Honble Ms. Archana Wadhwa, Judicial Member Hon'ble Mr. Sahab Singh, Technical Member Appearance:
Mr. M.S.Negi, DR for the Appellants Mr. Saurabh Kapoor, Adv for the Respondent Date of Hearing: 20.11.2012 Date of Decision:
ORDER NO . _ Per Ms. Archana Wadhwa
Being aggrieved with the order passed by Commissioner (Appeals), Revenue has filed the present appeal.
2. After hearing both the sides, we find that the Commissioner (Appeals) has upheld the clubbing of clearance made by the two units M/s. Nota Industrial Corporation and M/s Nota Tex Mechanical Engg. and has confirmed the duty of Rs. 3,43,230/- and imposed penalty of Rs. 1,00,000/- on M/s. Nota Industrial Corporation. It is seen that the original confirmation of demand by the Additional Commissioner was to the extent of Rs. 10,22,699/- along with imposition of penalty of identical amount on M/s. Nota Industrial Corporation. Commissioner (Appeals) has extended the benefit of trading goods to the appellant and has reduced the duty confirmation. In addition, he has set aside the penalty imposed upon Sh. Surjit Singh, Proprietor of M/s Nota Text Mechanical Engg.
3. Revenue has challenged the above order on two grounds that is, reduction of duty as also penalty on M/s Nota Industrial Corporation and setting aside of penalty on Proprietor of M/s. Nota Tex Mechanical Engg.
4. As regards reduction of duty, we find that Commissioner (Appeals) has relied upon the statement of Sh. Kulwant Rai Jagdev, wherein he has deposed that no machinery was supplied by them after 1994-95. Accordingly, he held as under:-
Further at the time of cross examination Shri Kulwant Rai had stated that in his statement dated 7.9.1999, transaction claimed to have been made to the appellant No.1 and M/s Nota Tex Mechincal Engg. pertain to the year 1994-95 only. He clearly stated that they have not raised any bill without supplying machinery after 1994-95. From the above it is evident that the machines sold by M/s S.R. Jagdev & sons to the appellant No.1 or M/s Nota Tex Mech. Engg were either manufactured by M/s S.R. Jagdev & Sons themselves or were purchased by them and were not manufactured by appellant No.1 or M/s. Nota Tex Mechnical engineers as alleged by the department.
As regards the statement of Shri Rajinder Parsad Yadav, the appellant has claimed he being only a part-time accountant had no knowledge about the business activity undertaken by M/s Virendra Trading Co. Secondly, no opportunity was afforded to the appellant by the Adjudicating Authority for cross examination of shri Rajinder Parsad Yadav. Thirdly there is no evidence available on records to show that the machinery shown to have been purchased by the appellant from M/s. Virendra Trading Co. was manufactured by the appellant No.1 or by M/s Nota Tex Mech. Engg. Therefore in view of the foregoing discussions, statement of Sh. Rajinder Parsad Yadav cannot be relied upon and it cannot be said that machines purchased by appellant No.1 as well as M/s Nota Tex Mechanical Engineer were manufactured by them. From the above, it can be said that department has included sale of traded goods in the value of clearances for home consumption by treating the same as goods manufactured by appellant No. 1 and M/s Nota Mech. Engg on the basis of presumptions without bringing on records any conclusive evidence to this effect. Thus inclusion of value of traded goods in the value of goods manufactured and cleared by the appellant as well as M/s. Nota Mechanical Engg., is not justified.
5. As against the above, the grounds raised by the Revenue are reiteration of original reasons adopted by the Additional Commissioner (Appeals). We, on going through the said part of the order of Commissioner (Appeals), find no infirmity in the same.
6. However, we note that Commissioner (Appeals) upheld the duty demand of Rs.3,43,230/- by clubbing the clearance of both the units. Learned Adv. for the assessee fairly agrees that the said decision of the Commissioner has not been challenged by them. As such, in terms of the law declared by the Hon'ble Supreme Court in the case of M/s. Dharmender Textile, penalty required to be imposed under Section 11 AC, is equivalent to the duty confirmed. Accordingly we enhence the penalty from Rs. 1,00,000/- to Rs. 3,43,230/-. However, inasmuch as no option stand given to the appellant in terms of the proviso to Section 11 AC to deposit the duty, interest and 25% of penalty within a period of 30 days from the passing of order, such an option can be given at the appellate stage by higher form in view of the law declared by the Hon'ble Gujrat High Court. We accordingly, hold that if the appellants deposit the entire amount of duty and interest along with 25% of penalty within 30 days from passing of the present order, the penalty shall stand reduced to 25%. However, we make it clear that if 25% of duty confirmed is less than Rs. 1,00,000/-, the duty shall remain Rs. 1,00,000/- as the respondent have not challenged the said order of Commissioner (Appeals).
7. As regards setting aside of penalty on Sh. Surjit Singh Proprietor of M/s. Nota Tex Mechanical Engg., we find that the appellant authority has held as under:-
As regard imposition of penalty upon appellant No.2, it is observed that duty has been demanded after clubbing sale of both the units i.e. M/s Nota Industrial Corpn (appellant No. 1) and M/s Nota Tex Mechnical Works and the later unit of which appellant No.2 is proprietor has been held to be a dummy unit. Thus M/s. Nota Tex Mechnical Engg have no separate identity. Since M/s Nota Tex Mech. Engg. has no separate identity so its proprietor. i.e. appellant No.2 also does not have separate identity. As penalty has been imposed upon the appellant No. 1, so, as discussed above, no separate penalty is imposable upon the appellant No.2. Therefore, penalty imposed upon appellant No.2 is set aside. The Revenues plea for penalty on the proprietor of the second unit cannot be accepted inasmuch as it is the revenue itself who has contended that the second unit is a dummy unit and as such not in existence & penalty cannot be imposed upon the non-existence unit. As such, we do not interfere in the said part of the order of the Commissioner (Appeals) and reject the Revenues appeal against M/s Nota Tex Mech. Engg.
8. Both the appeals filed by the Revenue are disposed of in above manner.
(Pronounce in the open Court..) (Archana Wadhwa) Member (Judicial) (Sahab Singh) Member (Technical) Jyoti* ??
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