Custom, Excise & Service Tax Tribunal
Panchmal Plastics Pvt Ltd vs Commissioner Of Central Excise And ... on 9 February, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Application(s) Involved: E/MISC/541/2011, E/MISC/550/2009 in E/11/2007-DB, E/273/2007-DB, E/274/2007-DB, E/275/2007-DB Appeal(s) Involved: E/11/2007-DB, E/273/2007-DB, E/274/2007-DB, E/275/2007-DB [Arising out of Order-in-Appeal No 14/2006 dated 04/10/2006 passed by the Commissioner of Central Excise, Mangalore.] For approval and signature: HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI B.S.V.MURTHY, 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? Yes 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 PANCHMAL PLASTICS PVT LTD. NO-135, BAIKAMPADY INDUSTRIAL AREA, MANGALORE Appellant(s) Smt. SHILPA G. PAI, Director C/O, PANCHAMAL PLASTICS PVT LTD. NO-135, BAIKAMPADY INDUSTRIAL AREA, MANGALORE Appellant(s) Smt. NIRMALA V. SHENOY, Director C/O, PANCHAMAL PLASTICS PVT LTD. NO-135, BAIKAMPADY INDUSTRIAL AREA, MANGALORE Appellant(s) Smt. SHOBA C. SHENOY, Director C/O, PANCHAMAL PLASTICS PVT LTD. NO-135, BAIKAMPADY INDUSTRIAL AREA, MANGALORE Appellant(s) Versus Commissioner of Central Excise and Service Tax MANGALORE 7TH FLOOR, TRADE CENTRE, BUNTS HOSTEL RD., MANGALORE 575 003. KARNATAKA Respondent(s)
Appearance:
Mr. Ramesh Ananthan, Advocate No.452, 1st Floor, 18th Main, 4th T Block, Jayanagar, Bangalore 560 041. For the Appellant Mr. N. Jagadish, Superintendent (AR) For the Respondent Date of Hearing: 09/02/2015 Date of Decision: 09/02/2015 CORAM:
HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 20327-20330 / 2015 Per : ARCHANA WADHWA All the appeals are disposed of by a common order, as all of them arise out of the same impugned order passed by the Commissioner.
2. After hearing both the sides for quite some time, duly represented by Shri Ramesh Ananthan, Advocate for the appellants and Shri N. Jagadish, Superintendent (AR) for the Revenue, we find that a show-cause notice was issued to the appellants alleging clandestine activities and proposing a demand of Rs.2,26,09,375.25. The said show-cause notice was adjudicated by the Commissioner in the year 2001 vide which he confirmed duty amount of Rs.1,03,25,781/- and dropped the balance amount. He also imposed equal amount of duty as penalty on M/s. Panchmal Plastics Pvt. Ltd. along with imposition of penalty of Rs.5 lakh on Shri Laxman P. Shenoy, Managing Director of the appellant-company. However, the proposal in the show-cause notice to impose penalties on the other appellants who were Directors of the Company was vacated by the Commissioner vide his said order passed as Order-in-Original No.8/2001 dt. 22.10.2001.
3. Both the assessee as also Revenue filed an appeal against the said order of the Commissioner. The assessees appeal was taken up for disposal by the Tribunal and they were directed to deposit a part amount as a condition of hearing their appeals. Inasmuch as the appellant did not deposit the said amount, their appeals were ultimately dismissed by the Tribunal for non-compliance of stay order, vide Final Order No.1338-1339/2004 dated 5.8.2004. The appeal of the appellant and appeal of Shri Laxman C. Shenoy was dismissed by the Tribunal. The matter was not taken up further by the said two appellants and rested there only.
4. Revenues appeal against that part of order of the Commissioner vide which he dropped a part demand as also did not impose penalties on the other noticees, was disposed of by the Tribunal vide order No.796/2006 dated 12.4.2006. The appeals filed against the other Directors were also dismissed as barred by limitation, by refusing to condone the delay in filing the same. The said order of the Tribunal was appealed against by the Revenue before the Honble High Court and their appeals were also rejected by the High Court order dated 5.1.2007. As such, the issue of non-imposition of penalties upon the other Directors attained finality with the said order of the Honble High Court.
5. However, while disposing of the Revenues appeal against the main assessee M/s. Panchmal Plastics Pvt. Ltd., the Tribunal vide its order dated 12.4.2006 No.796/2006 remanded the matter to Commissioner for de novo decision, after taking into account the entire evidence available on record.
6. The present impugned order stands passed by the Commissioner in de novo proceedings vide which he has confirmed the entire amount of duty of Rs.2,26,09,375/- as was proposed in the show-cause notice, without realizing that a part of the same already stands confirmed against the appellant by the earlier order No.8/2001 passed by his predecessor and the appeals there against already stands dismissed by the Tribunal. The consequence of dismissal of the assessees appeal against the earlier order is that the duty confirmed by the earlier order of the Commissioner stands upheld against them. As such at this point, we find that the confirmation of the same quantum of duty i.e., including the earlier confirmed demand, by the Commissioner was not justified. The de novo proceedings before him were relatable to that demand only, which was originally dropped by the Commissioner and against which the Revenue had filed an appeal, which appeal was allowed by way of remand. As such, the scope or proceedings before the Commissioner were relatable only to that part of the demand, which was the subject matter of the Revenues appeal.
7. We also find that vide earlier order, penalty of Rs.5 lakhs was imposed on Shri Laxman P. Shenoy, the Managing Director of the Company and the penalties on the other Directors were dropped. Revenue aggrieved by the said part of the earlier order of the Commissioner challenged the same before Tribunal but their appeals were dismissed on the point of limitation. Such dismissal order of the Tribunal attained finality when the appeals filed by the Revenue there against before High Court was also dismissed. As such, the issue as regards non-imposition of penalties on the other Directors and as regards enhancement of penalty on Shri Laxman P. Shenoy attained finality. However, we find that the Commissioner vide his present impugned order had enhanced the penalty on Shri Laxman P. Shenoy to the extent of Rs.50 lakhs and has also imposed penalties on the other Directors to the extent of Rs.30 lakhs each.
8. At the outset, we agree with the contention of the learned advocate that it was not open to enhance penalty on Shri Laxman P. Shenoy or to impose penalties on the other Directors, when the earlier order of non-imposition of penalties stands upheld till the level of the Honble High Court. As such imposition of penalties on the Directors is beyond the scope of the remand proceedings and the jurisdiction of the Commissioner. We, accordingly, at this stage allow the appeals of Shri Laxman P. Shenoy, Managing Director; Smt. Shilpa G. Pai, Director; Smt. Nirmala, Director; and Smt. Shubha C. Shenoy, Director.
9. Having already observed that the Commissioner in de novo proceedings was concerned only with the duty amount of Rs.123 lakhs approximately which was originally dropped by the earlier Commissioner and remanded by the Tribunal. Similarly penalty imposition would also be relatable to the said amount only. All these issues are required to be re-examined by the Commissioner. On this count as also taking into account the appellants grievance that all the three notices of hearing issued by the Commissioner were not received by them as their factory was lying closed and by appreciating the fact that the appellants submission on merits have not been placed before the Commissioner by way of personal hearings, and in view of our observations as above, we set aside the impugned order and remand the matter to Commissioner in the case of M/s. Panchmal Plastics only. Needless to say that appellant should be given an opportunity to put forth their case. We also note that the matter is quite old and the Commissioner would take up the same as soon as possible, preferably within a period of four months from the date of receipt of the order. The appellants should cooperate with the adjudicating authority and would not seek either unnecessary adjournments or in any way would delay the proceedings. If the appellant intentionally delay the proceedings, the Commissioner would be at liberty to go ahead and decide the matter without any further notice to the appellants. All the appeals are disposed of in above manner.
(Order pronounced in open court) B.S.V.MURTHY TECHNICAL MEMBER ARCHANA WADHWA JUDICIAL MEMBER rv 5