Customs, Excise and Gold Tribunal - Tamil Nadu
Sree Vadivambigai Textile Mills Ltd. vs Commissioner Of Central Excise on 1 June, 2005
ORDER P.G. Chacko, Member (J)
1. Appeal Nos. E/534/2004 (filed by the assessee) and E/560/2004 (filed by the Revenue) are against one order of the Commissioner (Appeals). After examining the records and hearing both sides in these two appeals, I find that the original authority had, apart from confirming a demand of duty against the assessee, imposed a penalty of Rs. 2,66,975/- (equal to duty) on them under Section 11AC of the Central Excise Act. The first appellate authority reduced the quantum of penalty to Rs. 50,000/-. The assessee is now in appeal against the penalty sustained by the lower appellate authority under Section 11AC, while the Revenue is aggrieved by the reduction of the quantum of penalty by the said authority. In both the appeals, the primary question is as to whether, in the facts of the case, any penalty was liable to be imposed on the assessee under Section 11AC. It is submitted by ld. Consultant for the assessee that no such penalty was imposable on them as they had paid the entire amount of duty along with interest prior to issuance of the show-cause notice. In this connection, he has relied on the following decisions :
(i) Commissioner of Central Excise, Delhi-III, Gurgaon v. Machino Montell (I) Ltd. 2000 (168) E.L.T.466 (Tri.)
(ii) Premier Instruments & Controls Ltd. v. Commissioner of Central Excise, Coimbatore Ld. DR has reiterated the relevant findings of the original authority and the first appellate authority. After considering the case law cited by ld. Consultant, I find that, the above issue is no more res integra. It is settled law that where duty was paid prior to issue of show-cause notice, no penalty was imposable under Section 11AC. Hence the assessees' appeal is allowed, while the Revenue's appeal is dismissed.
2. In the above case, the original authority had also imposed a personal penalty of Rs. 5,000/- on Shri V. Lakshmanan, a whole-time Director of the assessee-company, under Rule 209A of the Central Excise Rules, 1944 read with Rule 26 of the Central Excise Rules, 2002. This penalty was also sustained by the first appellate authority. Hence Appeal No. E/573/2004 filed by Shri V. Lakshmanan. I have already held that no penalty was imposable on the company in the facts of this case. It would follow that no personal penalty was liable to be imposed on any Director of the company. Moreover, the orders of the lower authorities do not disclose anything that would justify a penalty on the appellant under Rule 209A. This Rule could be invoked for penalising a person only when it was found that he physically dealt with the goods knowing/believing that the goods were liable to confiscation. In this case, there is no finding by any of the authorities that Shri V. Lakshmanan dealt with any excisable goods in the above manner. Ld. Consultant has relied on the Tribunal's decision in the case of Studio Printall (New Delhi) Pvt. Ltd. v. Commissioner of Central Excise, Delhi-I , in support of his argument that no penalty was impossible on the appellants under Rule 209A. The cited decision seems to support the appellants' contention. Hence the penalty imposed on the appellant under Rule 209A and Rule 26 of the Central Excise Rules, 2002 is set aside. Appeal No. E/573/2004 is allowed.
(Dictated and pronounced in open Court)