Custom, Excise & Service Tax Tribunal
M/S. U.T. Ltd vs Cce, Chennai on 17 June, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/701/1999
(Arising out of Order in Original No. 5/99 dated 28.01.99, passed by the Commissioner of Central Excise, Chennai).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Dr. CHITTARANJAN SATAPATHY, 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?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _________________________________________________________
M/s. U.T. Ltd. : Appellants
Vs.
CCE, Chennai : Respondents
Appearance Shri Nirmal Kumar Chowdhury, Adv., for the appellant Shri C. Rangaraju, SDR, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Dr. CHITTARANJAN SATAPATHY, Technical Member Date of hearing : 17.06.2010 Date of decision : 17.06.2010 Final ORDER No._____________ Per: Jyoti Balasundaram In this case, the Commissioner of Central Excise had confirmed a demand of Rs. 14,48,472/- against the assessees in terms of the proviso to Section 11A of the Central Excise Act, 1944, imposed a penalty of Rs.4,97,078/- in terms of Section 11AC of the Act and Rs. 1,44,000/- under Rule 173Q of the Central Excise Rules,1944. The assessees preferred an appeal No. E/701/99 before the Tribunal, which vide its Final Order No.102/06 dated 16.02.2006, upheld the duty demand but reduced the penalty under Section 11AC to Rs. One lakh and set aside the penalty imposed under Rule 173Q. The Revenue preferred C.M.A. No. 100/07, raising the following questions of law:-
1. Whether the quantum of penalty prescribed under Section 11AC of the Central Excise Act, 1944, as equivalent to duty determined is mandatory in nature or not?
2. Whether or not the Honble CESTAT was not in error in setting aside fully, the penalty imposed under Rule 173 Q of the erstwhile Central Excise Rules, 1944, on the reason that it was over and above the penalty imposed under Section 11AC when factually it was imposed only on those clearances made before the date of enactment of Section 11AC i.e., 28.09.1996?
3. Whether or not the CESTAT was not in error or not charging the interest under Section 11AB of the Central Excise Act, 1944 as prayed for by the department before it atleast for the clearances made after the date of enactment of the said provision viz., 28.09.1996?
The High Court remitted the case to the Tribunal to re-consider the issue in terms of the decision of the Apex Court in UOI Vs. Dharamendra Textile Processors 2008 (306) ITR 277 and Commissioner of Central Excise, Pune Vs. SKF India Ltd. 2009 (239) ELT 385, after setting aside the order of the Tribunal. The Revenue challenged the order of the Tribunal in so far as it related to setting aside the penalty under Section 11AC, which came into force on 28.09.96, which was dismissed by the Tribunal vide Final Order No.876/04 dated 12.10.04, holding that no penalty can be imposed under Section 11AC prior to its introduction in the statute.
2. It is under the direction of the Honble High Court in C.M.A. No. 100/07 dated 11.09.07, that the matter is placed before the Tribunal for a fresh decision.
3. We have heard both sides.
4. There was no challenge to the duty demand by the assessees before the High Court. Hence, we are only required to consider whether penalty equal to the duty confirmed for the period post 28.09.96, is required to be imposed and whether interest is required to be charged under Section 11AB after 28.09.96. We are also required to consider whether the assessees are liable to penalty under the provisions of Rule 173Q. Levy of interest is attracted under Section 11AB once duty has been confirmed, and by applying the proviso to Section 11A. We are therefore hold that the assessees are liable to pay interest post 28.09.96 on the duty confirmed for the period subsequent to the above mentioned date. Penalty equal to duty evaded subsequent to 28.09.96 is also required to be imposed in the light of the decision in UOI Vs. Dharamendra Textile Processors (supra). As regards penalty under Rule 173Q, as we are upholding the penalty of Rs.4,97,078/- under the provisions of Section 11AC of the Central Excise Act, we are of the view that no penalty over and above the penalty under Section 11AC is required to be imposed on the assessees.
5. In the result, the appeal is partly allowed by setting aside the penalty under Section 173 Q of the Central Excise Rules and imposing penalty equal to the duty confirmed by the authorities after 28.09.96 and hold that the assessees are liable to pay interest under Section 11AB subsequent to the date of its introduction in the statute.
( Order dictated and pronounced in the open Court)
(Dr. CHITTARANJAN SATAPATHY) (JYOTI BALASUNDARAM)
TECHNICAL MEMBER VICE PRESIDENT
BB
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