Customs, Excise and Gold Tribunal - Delhi
Pinkline Exim P. Ltd. And Shri Mahesh ... vs Commissioner Of Central Excise on 8 December, 2004
Equivalent citations: 2005(101)ECC521
ORDER P.S. Bajaj, Member (J)
1. Heard. The duty amount involved in the first appeal is of Rs. 5,38,52,735 with equal amount of penalty which has been confirmed against the company Appellant No. 1 in Appeal No. E/5118/04-B, whereas penalty of Rs. 50 lakhs has been imposed on the Appellant No. 2 in Appeal No. E/5119/04-B, who was Director of the company No. 1 at the relevant time. The company Appellant No. 1 is a 100% EOU. The duty amount has been confirmed against it by denying the benefit of the Notification No. 8/97-CE dated 1.3.97 in respect of DTA sales made during the period in dispute detailed in the show cause notice as well as on the ground of having bogus/non-genuine transactions by selling the goods at throwaway nominal to price the buyers who even did not exist. The learned Counsel has contended that the benefit of Notification 8/97 could not be denied even it is taken that the appellant company purchased the raw material from other 100% EOUs. He has relied upon the ratio of law laid down in Favourite Industries v. Commissioner of Central Excise, Surat-I, 2003 (156) ELT 802. Another contention put forth by the Counsel is that part of the sale of the goods in the DTA was with permission of the competent authority and that on the part which was beyond the limit prescribed under the permission order, duty could be claimed only under Section 3(1) of the Act and not under the proviso to this Section. He has referred to the Tribunal's decision in Sam Spintex Ltd. v. Commissioner of Central Excise, Indore, 2004 (163) ELT 212 wherein the Tribunal has followed the earlier judgment rendererd in Commissioner v. Pratap Singh, 2003 (153) ELT 711. Another Judgment relied upon by the Counsel is Ratnagiri Textiles Ltd. & Anr. v. CCE, Jaipur 2003 (110) ECR 718. Further the Counsel has contended that the duty being chargeable under Section 3(1) of the Act, could not be recovered in terms of Notification 125/84-CE dated 26.5.84. Lastly, before closing the arguments, the Counsel has pleaded financial hardship of the company and referred to the Tribunal's judgment rendered in Swadeshi Polytex Ltd. v. CCE, Ghaziabad 2004 (171) ELT 22.
2. We have heard the learned SDR, Shri O.P. Arora and gone through the record. In our view, none of the contentions raised by the counsel deserves to be accepted. It is an undisputed fact that the appellant company is 100% EOU and could sell the goods in the DTA and claim the benefit of Notification No. 8/97-CE dated 1.3.97 in respect of duty, if it had manufactured those goods out of the indigenous raw material. The raw material procured by the appellant company was from other 100% EOU who had imported the same and which could not said to be indigenous. The ratio of law laid down in Favourite Industries (supra) holding that for the facility of deemed export in Chapter IX of the Import Export Policy, no distinction existed between the goods supplied by a 100% EOU and the goods supplied by a unit in a DTA, is not attracted to the facts of the present case.
3. Regarding the clearance of the goods without permission by the appellant company, the Tribunal in Sam Spintex Ltd. (supra) took the view that the duty payable would be under Section 3(1) of the Act. But that view was not accepted/endorsed by the Larger Bench of the Tribunal in Himalya International Ltd. v. Commissioner, 2003 (154) ELT 580. Moreover, even the sale of the goods effected by the company in the DTA, had not been found to be a genuine one. The goods had been sold by it virtually at a throw-away price without any justification. Even the alleged buyers to whom the goods were sold, did not exist and had no whereabout as it is evident from the findings recorded in paras 11.5, 11.6 and 11.7 of the impugned order, by the adjudicating authority. The contention of the Counsel that the goods were sold at low price as those were damaged goods cannot be accepted at this stage for want of any evidence to corroborate the same.
4. The benefit of Notification 125/84 pleaded by the Counsel also cannot be allowed to the appellant company. This Notification only exempts the payment of excise duty on the goods sold by the 100% EOU in a DTA, but has no application where the sale had been conducted in an unauthorised manner. The ratio of law laid down in Ratnagiri Textiles Ltd. & Anr. (supra) is also of no avail to the appellant at this stage; in that case, it has been only observed that as per the CBEC Circular, the additional duty of Customs is leviable at effective rates and not at Tariff Rates. For the present, we are not concerned with this issue at all. On merits, we do not find that a prima-facie case has been made out by the appellant company for seeking total waiver of the pre-deposit of the duty amount. The financial hardship of the appellant company as pleaded by the Counsel can at the most be taken into account while determining the pre-deposit amount and not for allowing total waiver. It cannot be denied that the Government also needs money for implementation of its programmes and no assessee can be allowed to play with the huge amount of revenue and when demanded, to come and plead financial hardship for payment. It is for him to arrange for the money and pay back the Govt. revenue.
5. In the light of the discussion made above and keeping in view the facts and circumstances of the case in view, the appellant company is directed to make pre-deposit Rs. 4 crores within a period of 8 weeks from today and on making this deposit, the pre-deposit of the balance duty and the entire penalty shall stand waived and its recovery stayed against the appellant company. Similarly, the appellant No. 2, the Director of the company who had been managing the entire show of the company and abetting the company in the evasion of the duty is directed to make pre-deposit of Rs. 10 lakhs within the above-said period. On making this deposit by him, the pre-deposit of the balance amount of penalty, by him shall stand waived and its recovery stayed till the disposal of the appeal. But in the event of failure by either of the two appellants to comply with the order, the appeals shall be liable to be dismissed under Section 35F of the Act. Compliance to be reported on 17.2.2005.