Custom, Excise & Service Tax Tribunal
Atul Ltd vs Daman on 12 July, 2018
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Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
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Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012-DB
(Arising out of OIA-SKSS/238-239/DMN/VALSAD/2010-11 dated 15.11.2010 and OIA-
SKSS/294/DMN/VALSAD/2010-11 dt. 10.12.2010 passed by the Commissioner
(Appeals) of Central Excise, Customs & Service Tax, Daman and OIA-CS/152-
153/DMN/VALSAD/2011-12 dated 22.12.2011 passed by the Commissioner (Appeals)
of Central Excise, Customs & Service Tax, Surat-I)
Atul Ltd. : Appellant (s)
Vs
CCE & ST-Daman : Respondent (s)
Represented by:
For Appellant (s) : Shri Rakesh Harish Kumar Shah (Manager) For Respondent (s): Shri Amit Kumar Mishra, Dy. Commr.(AR) CORAM :
Mr. Ramesh Nair, Hon'ble Member (Judicial) Mr. Raju, Hon'ble Member (Technical) Date of Hearing:18.06.2018 Date of Decision: 12.07.2018 ORDER No. A/11409-11412 / 2018 Per : Mr. Ramesh Nair In all the appeals common facts involved are that the appellants are engaged in the manufacture of fly ash bricks out of coal ash which came into existence during generation of electricity. For the purpose of home consumption, the appellants cleared fly ash bricks on payment of duty, however, the appellants have also cleared fly ash bricks for captive consumption and the same was used in the construction of building within the factory premises and also for floor or road outside the plant, but, within the factory. The said clearances of captive consumption were made 2 Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012 without payment of duty. The department has issued show cause notice dated 13.10.2009 for the period October 2004 to March 2009, show cause notice dated 18.03.2010 for the period April 2009 to January 2010 and show cause notice dated 24.01.2011 for the period February 2010 to November 2010. In all three show cause notices, the demand of excise duty on the captive consumption of fly ash bricks was proposed and also penalty under Section 11AC. In the first show cause notice dated 13.10.2009, the personal penalty on Shri Rakesh Harish Kumar Shah, Manager of M/s Atul Ltd was also proposed under Rule 26 of the Central Excise Rules, 2002. The adjudication authority confirmed the demand in all three show cause notices, imposed penalty under Section 11AC and also imposed penalty on Shri Rakesh Harish Kumar Shah for an amount of Rs.
1,00,000/- under Rule, 26 of the Central Excise Rules, 2002. The appellants being aggrieved by the order-in-original filed appeals before the Commissioner (Appeals) which came to be rejected, therefore, the present appeals.
2. Shri Rakesh Harish Kumar Shah, Manager of the appellants Company appeared on behalf of the appellants. He fairly concedes that the appellants are not contesting the demand of excise duty on merit, however, the contest is on the ground of time barred. He submits that as regard the first show cause notice dated 13.10.2009 it was issued for 3 Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012 extended period. He submits that the appellant was under bonafide belief that the goods consumed captively is exempted vide Notification No. 67/95-CE dated 16.03.1995. Therefore, there is no malafide intention to evade excise duty. Accordingly, in absence of any intent the demand for the extended period is not sustainable. Consequently, the penalty is also not imposable. As regard the personal penalty on Shri Rakesh Harish Kumar Shah, he submits that the issue involved is of interpretation of Notification No. 67/1995-CE dated 16.03.1995, therefore, there is no intention to evade excise duty. Therefore, the personal penalty imposed on the employee of the company is also not justified. He placed reliance on the judgement of this Tribunal in the case of Rashtriya Ispat Nigam Ltd. Vs. Commissioner of Central Excise, Visakhapatnam - 2003 (161) ELT 0285 (Tri.-Bang.)
3. Shri Amit Kumar Mishra, Ld. Deputy Commissioner (AR) appearing on behalf of the Revenue reiterated the findings of the impugned order. He submits that the appellant has never disclosed to the department regarding their claim on exemption notification No. 67/1995-CE dated 16.03.1995. Therefore, there is a clear suppression of the fact on the part of the appellant, hence, the demand for the extended period was rightly invoked.
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Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012
4. We have carefully considered the submission made by both sides and perused the records. As per the submission made by the appellants, there is no dispute that the demand raised in the captive consumption of fly ash bricks is clearly sustainable on merit. The only issue to be decided is: whether the demand raised for extended period by invoking the proviso to Section 11 A (i) of the Central Excise Act, 1944 is legal and correct or otherwise. The second issue in the facts and circumstances of the case is:
whether the penalty imposed under Section 11AC is correct and legal. The third point is: whether the personal penalty imposed on Shri Rakesh Harish Kumar Shah is justified.
5. On perusal of the facts, we find that the appellants have never disclosed to the department regarding their claim of Notification No. 67/95-CE dated 16.03.1995 in any manner. It is also observed that the appellant is registered with the central excise and discharging the excise duty on the major clearances made for home consumption. They are filing regular ER-1 Return to the department. In the ER-1 Return even the production and clearances covered under any exemption notification should also be declared. The appellant failed to declare the production clearances of the goods consumed captively and also not claimed the exemption notification in the ER-1 Return despite there is column in the ER-1 Return for mentioning the exemption notification. Therefore, with 5 Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012 this failure, the appellants have suppressed the fact from the department. Accordingly, the extended period for the demand is clearly invokable in the facts of the present case. Consequently, the penalty under Section 11AC is also legal and correct in respect of the demand pertaining to the extended period. As regards the penalty imposed for the normal period it cannot be said that the appellants have suppressed any fact for the reason that once a show cause notice was issued in subsequent show cause notice of the same issue, the suppression of the fact cannot be alleged. For the purpose of penalty under Section 11 AC ingredient of suppression of fact, collusion, fraud, misstatement etc., should exist. After issuance of first show cause notice, all these ingredients do not exist; therefore, penalty under Section 11AC cannot be imposed in respect of demand raised in the normal period. As regard the penalty imposed on Shri Rakesh Harish Kumar Shah, we find that he is only an employee of the company in the matter relates to the removal of the goods within the factory for captive consumption. In these facts, it cannot be said that the employee Shri Rakesh Harish Kumar Shah was involved in any malafide Act. Therefore, in our view, the penalty was not required to be imposed on the employee of the company considering the nature of the offence and overall facts and circumstances of the case.
6. As per our above discussion, the demand of excise duty for the entire period involved in tall three show cause notices is upheld. The 6 Appeal No. E/1948-1949/2010, E/203/2011, E/68/2012 penalty under Section 11 AC imposed by the lower authorities related to the demand of extended period is upheld. The penalty imposed under Section 11 AC for the normal period in respect of all three show cause notices is set-aside. The penalty imposed on Shri Rakesh Harish Kumar Shah under Rule 26 of the Central Excise Act is set-aside.
7. In the result, the appeals are partly allowed in above terms.
(Order Pronounced on_12.07.2018)
(Raju) (Ramesh Nair)
Member (Technical) Member (Judicial)
G.Y.