Custom, Excise & Service Tax Tribunal
Commissioner Of Customs, Central ... vs Empee Sugars & Chemicals Ltd on 5 June, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/10/2009-SM [Arising out of Order-in-Appeal No. 65/2008 dated 29/09/2008 passed by the Commissioner of Central Excise and Customs, Guntur] For approval and signature: HON'BLE MRS ARCHANA WADHWA, JUDICIAL 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 Commissioner of Customs, Central Excise and Service Tax, Guntur P.B. No. 331, C.R. Building, Kannavarithota, Guntur, - 522 004 Andhra Pradesh Appellant(s) Versus Empee Sugars & Chemicals Ltd. Ayyapureddypalem Naidupeta, Nellore Dist., Andhra Pradesh Respondent(s)
Appearance:
Mr. A.K. Nigam, AR For the Appellant Mr. H.Y. Raju, Advocate #140-B, 1st Floor, 9th Cross, Margosa Road, Malleswaram, Bangalore 560 003 For the Respondent Date of Hearing: 03/02/2015 Date of Decision: 05/06/2015 CORAM:
HON'BLE MRS ARCHANA WADHWA, JUDICIAL MEMBER Final Order No. 21192 / 2015 Being aggrieved with the order passed by the Commissioner (Appeals) Revenue has filed the present appeal. I have heard Mr. A.K. Nigam, DR appearing for the Revenue and Mr. H.Y. Raju, Advocate appearing for the respondent.
2. As per facts on record the respondent is engaged in the manufacture of sugar and molasses. Revenue conducted certain investigations and based upon certain vouchers recovered from M/s. BVS Lorry Transport and the statement recorded during the investigations, entertained a view that the appellant has clandestinely removed around 12700 quintals of sugar, involving duty of Rs. 10,79,500/- (Rupees Ten Lakhs Seventy Nine Thousand Five Hundred only). Accordingly proceedings were initiated against them by way of issuance of a show-cause notice proposing to confirm the demand and to impose penalty. The original adjudicating authority confirmed the demand of Rs. 10,79,500/- (Rupees Ten Lakhs Seventy Nine Thousand Five Hundred only) on 12700 quintals of sugar alleged to be clandestinely removed. Interest was also confirmed along with imposition of penalty of equal amount under Section 11AC of the Central Excise Act. In addition he also imposed penalty of Rs. 3,00,000/- (Rupees Three Lakhs only) on the respondent under Rule 25 of Central Excise Rules. Further penalty of Rs. 3,00,000/- (Rupees Three Lakhs) each was imposed on Shri. Ramasamy Chandra Mohan, Vice President and Shri. Gade Satyanarayana Reddy, Chief Chemist in terms of Rule 26 of Central Excise Rules 2002.
3. On appeal against the above order, Commissioner (Appeals) observed that the Revenues case in respect of 5200 quintals of sugar is based upon 104 missing invoices, which were actually not recovered by the Revenue. As such he held that no demand can be confirmed in respect of the said quantum of sugar. Accordingly he confirmed the demand of duty in respect of the balance amount to the extent of Rs. 6,37,500/- (Rupees Six Lakhs Thirty Seven Thousand Five Hundred only) and also upheld imposition of penalty to that extent, in terms of the provisions of Section 11AC. In respect of penalty of Rs. 3,00,000/- (Rupees Three Lakhs only) imposed under Rule 25 of the Central Excise Rules, he observed that inasmuch as penalty has already been imposed under Section 11AC, which was equal to the duty confirmed, it was not justifiable to impose penalty under Rule 25. He accordingly set aside the same.
As regards penalties imposed upon the Vice President and Chief Chemist, he observed that there is virtually no evidence on record showing the involvement of the said two persons. The adjudicating authority has imposed penalties upon them only on the presumptions that clandestine clearances could not have happened without their knowledge and approval. Thus appreciating the lack of evidence showing no involvement of the said two persons, he set aside the penalties of Rs. 3,00,000/- (Rupees Three Lakhs only) imposed on each of them.
The said order of Commissioner (Appeals) stands appealed against by the Revenue.
4. The main contention of the Revenue is that the dropping of demand in respect of 5200 quintals of sugar, which was based upon the missing 104 invoices was not justifiable inasmuch as the Revenue has calculated such quantum of clandestine removal based upon 50 quintals of removal in respect of each invoice. The last set of invoices showed that much removal per invoice and as such Revenue was justified in adopting the same quantum even for the missing invoices.
5. I find no merits in the above contention of the Revenue. To confirm demand of duty based upon the assumption that such missing invoices would have also cleared 50 Kgs of sugar per invoice is too presumptive. The clandestine removals cannot be upheld on such surmises and conjectures and in the absence of proof and evidence to show clandestine removal of huge quantity of 5200 quintals. As such I find no infirmity in the views of Commissioner (Appeals).
6. The Revenue has also challenged dropping of penalties in respect of the two invoices. Apart from the fact that the appeal only shows the manufacturing unit as respondent and no separate appeals stand filed by the Revenue in respect of the said two persons, in any case, does not find any infirmity in the views of Commissioner (Appeals). He has rightly observed that there is no evidence showing involvement of the said two persons in the clandestine activities of the manufacturing unit. As such I am of the view that said part of Commissioner (Appeals) order cannot be interfered with.
7. In view of the foregoing Revenues appeal is rejected.
(Order pronounced in open court on )
(ARCHANA WADHWA)
JUDICIAL MEMBER
iss