Custom, Excise & Service Tax Tribunal
M/S.G.T.Z.(India) Pvt.Ltd vs Commissioner Of Central Excise, ... on 23 November, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Stay Petition No.E/STAY/511/2011
In Appeal No.E/439/2011
(Arising out of Order-in-Appeal No.48/Kol-VII/2011 dated 01.03.2011 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata.)
FOR APPROVAL AND SIGNATURE
HONBLE S.K. GAULE, MEMBER(TECHNICAL)
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?
M/s.G.T.Z.(India) Pvt.Ltd.
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise, Kol-VII
Respondent (s)
Appearance:
Shri Arijit Chakraborty, Advocate for the Appellant (s) Shri S.Mishra, Addl.Commr.(A.R.) for the Revenue (s) CORAM:
Honble Shri S.K. Gaule, Member(Technical) Date of Hearing/Decision :- 23.11.2011 Date of Pronouncement :- 23.11.2011 ORDER NO.
1. Heard both sides.
2. Applicant filed this Application for waiver of penalty imposed under Section 11AC. The contention of applicant is that they have already paid duty involved in this case and the appeal has been rejected by the learned Commissioner(Appeals) on the ground of non-compliance. Learned Commissioner(Appeals) has not decided the case on merits. Considering the facts of the case I find that Appeal itself can be disposed of at this stage. Therefore I take up the case for decision after waiving the requirement of pre-deposit of penalty.
3. Briefly stated facts of the case are that a stock-taking was conducted by the officers of the central excise and a shortage was found In the stock of inputs. Therefore proceedings were initiated against them which resulted in demanding duty of Rs.2,12,278/-(Rupees Two Lakhs Twelve Thousand Two Hundred and Seventy Eight only), interest and equal amount of penalty was also imposed by the lower adjudicating authority. Learned Commissioner(Appeals) upon challenge by the appellant directed the appellant to pre-deposit an amount of Rs.1,00,000/-(Rupees One Lakh only) towards penalty imposed under Section 11AC. On compliance not being made learned Commissioner(Appeals) rejected their appeal. Aggrieved by the same the appellant field this Appeal.
4. Contention of the appellant is that shortages have been found in their input namely Di-Ethyl Phthalate which is a highly volatile product and from inception of their unit they have received the quantity of (approx) 21,000 M.T. of this item whereas the shortage noticed was 33 tonnes (approx.) and there is no allegation against them for clandestine removal nor the department have produced any corroborative evidence that the appellant have indulged in any kind of clandestine removal or mal-practice. The contention is that they have already reversed the total CENVAT credit involved in this case and in these circumstances the penalty under Section 11AC of Central Excise Act, 1944 is not imposable. In support of their contention they have placed reliance on the decision of Honble Punjab & Haryana High Court in the case of CCE, Chandigarh v. Nachiketa Paper Ltd., Derabassi 2007 (10) LCX 0116. In that case it was held that in absence of fraud, collusion or any willful misstatement or suppression of facts penalty under Section 11AC cannot be imposed based on suspicion. In support of their contention they have also placed reliance on the judgement of Honble Punjab & Haryana High Court in the case of Commissioner of Central Excise vs. H.S.Steels (P) Ltd. 2011 (02) LCX 0031.
5. The contention of learned Addl.Commr.(A.R.) appearing on behalf of the Department is that learned Commissioner(Appeals) has asked for pre-deposit of penalty and the appellant have not be complied with the same. He submitted that right to appeal is substantive but conditional. In support of his contention he placed reliance on the decision of Honble Apex Court in the case of Stuti Electronics vs. UOI 2010 (254) E.L.T. A-45 (S.C.). Learned Addl.Commr.(A.R.) also submitted that penalty has been proposed under Rule 15(2) read with 11AC.
6. I have considered the submission and perused the record. Undisputedly the case involved shortage of inputs and it is also not in dispute that the appellant have already reversed the CENVAT Credit involved in the case. Learned Commissioner(Appeals) has not decided the case on its merits. The appellant is challenging only the imposition of penalty on the ground that there is no case of fraud, collusion, misstatement or suppression of facts in this case and there is only a shortage of inputs which are highly volatile and therefore equal amount of penalty under Section 11AC is not imposable against them. For equal amount of penalty under Rule 15(2) and Section 11AC the ingredients are namely fraud, collusion, misstatement, suppression of facts. Similar view have been held by Honble Punjab & Haryana High Court in the case of Nachiketa Paper Ltd. (supra) and H.S. Steels (supra). I find that this aspect has not been considered by the learned Commissioner since the Appeal was rejected only for non-compliance of requirement of pre-deposit therefore this requires re-consideration. In view of the above the case is remanded to the learned Commissioner(Appeals) to decide the case on its merits, afresh. Both the sides are at liberty to produce documents in their support. Needless to say a reasonable opportunity of hearing may be granted to the appellant. Stay Petition and Appeal disposed of as above.
(Pronounced and dictated in the open court.) Sd/ (S.K. GAULE) MEMBER(TECHNICAL) sm 4 Appeal No.E/439/2011