Customs, Excise and Gold Tribunal - Tamil Nadu
Cce vs Cmi Metal Recycling (India) Pvt. Ltd. on 27 February, 2004
ORDER S.L. Peeran, Member (J)
1. The Revenue is aggrieved with the Commissioner (Appeals) order No. 64/2002 (M-II) dated 21.6.2002 in which he has held that the goods which were confiscated and redemption fine imposed were later exported. He has come to the conclusion that in such circumstances, Rule 173Q is not attracted and penalty imposed by the original authority is required to be set aside as no duty was liable to be paid on exported goods.
2. The appellants are a 100% EOU. They had cleared certain goods for domestic sales without payment of duty which was seized and handed over to assessee for safe custody. Later, they exported those goods and also paid redemption fine. In that circumstance, penalty imposed under Rule 173Q was set aside by the Commissioner which is the ground of appeal before this bench.
3. Revenue contends that once there was contravention committed the appellants in removing the goods without payment of duty, penalty under Rule 173Q is leviable. However, it is admitted in the appeal memo that no duty is required to be paid as the goods had been exported. It is also stated that RG.1 register was not maintained for the goods and thus penalty cannot be set aside.
4. Heard Ld. DR who argued on the basis of grounds raised in the appeal memo and submitted that penalty imposed on the appellant for contravention of Rule 173Q in not paying duty while removing the goods is required to be sustained.
5. On the other hand, the Counsel submits that Rule 173Q falls under Chapter VII which is not applicable to a 100% Export Oriented Unit (EOU). Further, the Rule 173Q is invoked where there is evasion of duty. In the present case, they have already paid redemption fine for contravention in removing the goods without payment. However, the same were exported and not liable to be paid duty. In this regard, he submits that the issue is no longer res integra and the Commissioner has looked into the case law while setting aside the penalty. He submits that this view has been upheld by the Tribunal in the case of CCE Noida Vs Kurt-O-John Shoe Components as reported in 2004-TAXINDIAONLINE-50-CESTAT-DEL. The Tribunal after due consideration placing reliance on the judgement of Kuntal Granites (P) Ltd Vs. CCE Belgaum, 2002-TAXINDIAONLINE-44-CESTAT-BANG and that of CCE New Delhi Vs. Jindal Exports 2002 (59) ELT 281 held that in terms of Board's circular No. 212/46/96-CX. dated 20.5.96, a 100% EOU is not required to maintain RG-1 register. In that circumstance, the penalty imposed has been set aside by the Tribunal. Similar view was expressed by this bench in the case of BAPL INDUSTRIES LTD Vs. CCE Coimbatore, 2004 (164) ELT 54 (Tri-Chennai).
6. Ld. DR, in counter, submits that contravention of removal of goods under bond which was in their assessee's safe custody without payment of redemption fine is an offence which is required to be penalised. He also submits that merely because a wrong rule has been quoted that by itself will not take away the right of the department to penalise the assessee.
7. On a careful consideration of the submissions, it is seen that assessee was charged with penalty under Rule 173Q of Central Excise Rules. The question that arises for consideration is as to is whether Rule 173Q can be invoked for non-maintenance of RG. 1 Register by a 100% EOU. The Board's circular cited supra has laid down that Rule 173Q falls under Chapter VII which is not applicable to a 100% EOU. Therefore, the Tribunal in the above noted judgment has set aside penalties imposed under Chapter VII. The Commissioner has followed the ratio of the well laid down judgment while setting aside the penalty which is required to be confirmed. The order of the Commissioner is legal and proper. There is no infirmity in the same. There is no merit in the Revenue's appeal and the same is rejected. The cross objections filed by assessee is also disposed of accordingly.