Custom, Excise & Service Tax Tribunal
M/S. Impex Ferro Tech Ltd vs Commissioner Of Central Excise - Bolpur on 15 January, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal Nos. 1.E/752/2012
2.E /753/2012
(Arising out of Order-in-Appeal No. 191-92/BOL/2012 dated 28.09.2012 passed by the Commissioner (Appeals-III) of Central Excise, Kolkata)
FOR APPROVAL AND SIGNATURE
HONBLE Dr.D.M.Misra, MEMBER (JUDICIAL)
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the
CESTAT(Procedure) Rules, 1982 for publication in any
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
1. M/s. Impex Ferro Tech Ltd.
2. Sri Virendra Kumar Jain
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise - Bolpur
Respondent (s)
Appearance:
Shri Sukumar Sarkar, (AR) for the appellant (s) Sri S.S.Chatterjee, Suptd.(AR) for the Respondent CORAM:
Honble Dr.D.M.Misra, Member(Judicial) Date of Hearing/Decision: 15.01.16 Date of Pronouncement: 15.01.16 ORDER No. FO/A/75075-75076/2016 Per Dr. D.M.Misra
1. These two Appeals are filed against the Order-in-Appeal No. 191-192/BOL/2012/ dated 28.09.2012.
2. Briefly stated the facts of the case are that search operation was conducted in the factory premises of the Appellant on 28.11.2007, resulting into recovery/seizure of incriminatory documents relating to removal of goods without payment of duty. On completion of investigation, that is, scrutiny of the records retrieved and statement recorded, show-cause cum demand notice was issued alleging clandestine manufacture and removal of finished goods namely 17.650 MT of Ferro Maganese ( Prime grade) and 62.650 MT of Ferro Silico Manganese (off Grade) without payment of duty of Rs.5,18,436/-. On adjudication, the demand was confirmed against the Appellant company with equivalent penalty and penalty of Rs.5,18,436 was imposed on the Director under Rule 26 of Central Excise Rules, 2002.
3. Aggrieved by the said order the appellants have preferred appeals before the Ld. Commissioner (Appeals) who upheld the order of the adjudicating authority and rejected the appeals. Hence, the present appeals.
4. Ld. Representative Sri S.Sarkar for the appellants submits that in the present appeals they do not dispute about the liability of duty and penalty imposed on the appellant company. However, their grievance is that while confirming penalty against the appellant company, even after payment of entire amount of duty and interest, benefit of payment of 25% of the penalty imposed has not been extended to them. Further, he submits that there is no evidence against Mr. V.K.Jain, Director about his involvement in the manufacture and clearances of goods without payment of duty, therefore, imposition of personal penalty equal to the duty on him, under Rule 26 of the Central Excise Rules, 2002 is uncalled for, disproportionate and too harsh. He prays that penalty is not imposable on the Director or alternatively the penalty on him be reduced to the minimum.
5. Per contra, Ld. A.R. for the Revenue Sri S.S.Chatterjee has fairly accepted that the appellants are entitled to get the benefit of payment of 25% of the penalty imposed under section 11AC of CEA,1944. However, on the issue of imposition of penalty on the Director, Ld.A.R. for the revenue referred to the findings of the adjudicating authority, where in it has been categorically observed on the basis of the evidences/statements of the Deputy General Manager (Commercial), Sri Ram Sundar Singh, later ratified by the Director Sri V.K.Jain that goods were cleared without payment of duty against kuchha gate passes. Since the Director was aware of the entire process of clearance of goods without payment of duty, therefore, penalty has been rightly imposed on him under Rule 26 of Central Excise Rules, 2002.
6. Heard both sides and perused records. As far as the appeal filed by M/s. Impex Ferro Tech Ltd. is concerned, the only issue to be decided is: whether the appellant are eligible to the benefit of 25% of the penalty imposed under section 11AC of CEA, 1944, since the appellant company had undisputedly paid the duty along with interest. I find that this issue is covered by a plethora of cases including by the decision of the Honble Gujarat High Court in the case of Commissioner of Central Excise, Surat-I vs. Krishnaram Dyeing and Finishing Works, 2013 (298) E.L.T 376 (GUJ). Accordingly, the appellants are eligible to the benefit of discharging 25% of the penalty imposed.
7. As far as the penalty on the Director is concerned, on going through the orders of the authorities below, I find that the appellant-Director Sri V.K.Jain had accepted/ratified the statement of their DGM admitting the clearances of goods without payment of duty and the demand has been confirmed on the basis of said statements. In these circumstance, I do not see any reason for non-imposition of penalty on the Director as his role on removal of goods without payment of duty has been fairly established. However, keeping in view the amount of duty involved, I find that personal penalty equal to the duty amount imposed on the Director is too harsh. Therefore, in the interest of justice, it is appropriate that the penalty on the appellant Sri V.K.Jain be reduced to Rs.1,25,000/-. In view of the above, the appellant company is allowed to pay 25% of the penalty imposed under section 11AC of CEA, 1944 and Sri V.K.Jain is directed to pay penalty of Rs.1,25,000/- under Rule 26 of Central Excise Rules,2002. The appeals disposed off on the above terms.
(Dictated and pronounced in the open court) (Dr. D.M.MISRA) MEMBER (JUDICIAL) SS 5