Custom, Excise & Service Tax Tribunal
Parabolic Drugs Ltd vs Cce, Panchkula on 25 October, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SCO 147-148, SECTOR 17-C, CHANDIGARH-160017 SINGLE MEMBER BENCH COURT NO.1 Appeal No. E/54939-54945/2014 & [Arising out of the OIA No.186-192/SVS/PKL/14 dt.24.4.2014 passed by the CCE (Appeals), Delhi-III, Gurgaon) Appeal No. E/55622/2013 [Arising out of OIO No.28-36/CE/CHD-II/09 dt.22.12.2009 passed by the CCE, Chandigarh) Date of Hearing: 30.09.2016 Date of Decision: 25/10/2016 For Approval & signature: HonbleMr.Ashok Jindal, Member (Judicial) 1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3. Whether their Lordships wish to see the fair copy of the order? seen 4. Whether order is to be circulated to the Department Authorities? Yes Parabolic Drugs Ltd. Appellant Vs. CCE, Panchkula Respondent
Appearance Shri Surjeet Bhadu, Advocate for the appellant Shri V.Gupta, AR for the respondent CORAM:HonbleMr.Ashok Jindal, Member (Judicial) FINAL ORDER NO.: 61584-61591/2016 PER: ASHOK JINDAL The Appeal No.E/55622/2013 has been filed by the appellant against the impugned order imposing penalty of Rs.10 lakh under Rule 26(2) of Central Excise Rules, 2002 on the allegation that the appellant has not supplied the inputs alongwith invoices issued to the principal manufacturer. Therefore, the penalty is imposed under Rule 26(2) of Central Excise Rules, 2002.
2. The appeals Nos.E/54939-54945/2014 have been filed by the appellants for granting rebate claim but adjusting the same against the penalty imposed on the appellant in Appeal No.E/55622/2013. Therefore, all the appeals are taken up together for final disposal.
3. The contention of the learned Counsel for the appellant is that the goods were not held liable for confiscation as the appellant has not dealt with the goods at all. Therefore, the penalty under Rule 26 (2) ibid is not imposable on the appellant for the period prior to 1.3.2007. As per erstwhile Rule 26, the penalty can be imposed, if an assessee has dealt with the goods. Admittedly, when the appellant has issued invoices to the principal manufacturer and not dealt with the goods which were liable for confiscation, the penalty is not imposable on the appellant. To support his contention, he relied on the decision of this Tribunal in the case of Flex Industries Ltd. vs.CCE-2006 (211) ELT 479 (Tri.-Del.) and in the case of Duggar Fiber Pvt.Ltd. vs. CCE & ST -20015 (322) ELT 763 (Tri.-Del.). He, therefore, prayed that for the period where invoices issued prior to 1.3.2007, the penalty is not imposable on the appellant and for the post 1.3.2007 it is his submission that the appellant has issued only one invoice amounting to Rs.54,900/- involving Central Excise duty of Rs.9,048/- for that, the appellant is not contesting and he is ready to pay penalty to buy peace of mind.
4. For the remaining Appeals Nos.E/54939-54945/2014, it is the contention of the learned Counsel is that as the penalty is not imposable on the appellant, therefore, the adjustment of rebate claim is not sustainable. In that circumstance, rebate claim be allowed to the appellant.
5. On the other hand, learned AR opposed the contention of the learned Counsel and submitted that as the appellants were involved in the activity of issuance of invoices without physically despatch of the goods, therefore, the penalty is rightly imposed on the appellants. He relied on the decision of the Honble Punjab and Haryana High court in the case of M S Metals vs. CCE-2014 (309) ELT 241 (P&H) wherein it has been held that although for the period prior to 1.3.2007, Rule 26(2) was not in statute book, in such cases in spite of non applicability of Rule 26(2) for the period prior to 1-3-2007, penalty can be imposed under Rule 25(1)(d) and 26(1) of the Central Excise Rules as the person who purports to sell the goods cannot say that he is not the person concerned in selling of goods and merely issued invoice or that he did not contravene a provision relating to evasion of duty.
6. Head both sides and considered the submissions.
7. In Appeal No.E/55622/2013, the sole contention of the appellant in the matter is that when there was no provision in the statute in Rule 26 (2) to impose penalty on the appellant during the impugned period, therefore, no penalty is imposable on the appellant. Learned AR has relied on the decision of the Honble Punjab and Haryana High court in the case of M.S. Mertals (supra) to show that the Honble High Court has held that although the penalty under Rule 26(2) is not imposable but the penalty can be imposed under Rule 25(1)(d) and 26(1) of the Central Excise Rules.
8. I have gone through the show cause notice as well as the adjudication order, there is no such proposal to impose penalty on the appellant under Rule 25(1) (d) and Rule 26 (1) of Central Excise Rules, 2002. The show case notice proposed to impose penalty under Rule 26(2) of Central Excise Rules, 2002. The Honble High Court itself has observed that although the penalty under Rule 26 (2) is not imposable but penalty can be imposed under Rule 25(1) (d) of Central Excise Rules, 2002. Therefore, the said case law is not relevant to the facts of this case as in this case there is no proposal to impose penalty under Rule 25(1) (d). In these circumstances, I hold that for the period prior to 1.3.2007, the penalty is not imposable on the appellant for the period, post 1.3.2007, the penalty of Rs.9,048/- is confirmed.
9. With these observations, the Appeal No.E/55622/2013 is disposed of.
10. Further, Appeals Nos.E/54939-54945/2014 have been filed by the appellants against adjustment of rebate claim sanctioned to the appellant against the penalty imposed on the appellant in Appeal No.E/55622/2013. As the part penalty is not sustainable, therefore the amount of rebate claim is not be adjusted except Rs.9,048/.
11. In the result, the appeal Nos.E/54939-54945/2014 are allowed subject to the adjustment of Rs.9,048/-.
(pronounced in the open court on 25/10/2016) ( Ashok Jindal) Member (Judicial) mk 5 E/54939-54945/2014 & E/55622/13 M/s.Parabolic Drugs Ltd. vs. CCE, Delhi-III