Customs, Excise and Gold Tribunal - Mumbai
Jay Jagdish Sugar, Agasti Ssk Ltd. And ... vs Cce on 5 March, 2004
Equivalent citations: 2004(175)ELT314(TRI-MUMBAI)
ORDER Archana Wadhwa, Member (J)
1. All four appeals are being disposed of together as they arise out of the identical facts and circumstances.
2. M/s. Jay Jagdish Sugar is a merchant exporter and obtained a release order from the Director of Sugar, Govt. of India, New Delhi for procurement of sugar for export purposes. In one of the cases sugar was procured from M/s. Agasti SSK Ltd. and in the other cases the same was procured from M/s. Niphad SSK ltd. The appellant executed B-1 bond with the Central excise authorities, on the basis of which CT-1 certificate for procurement of sugar without payment of duty were issued by the superintendent central excise. Based upon the said certificates the sugar was obtained by M/s. Jay Jagdish sugar from the other two appellants. However, the said sugar obtained for export purposed could not be exported by the appellant inasmuch as the export order was cancelled by their buyers due to colour deterioration. Thereafter the sugar in question was diverted for home consumption and the duty of Rs. 15,68,250/- (rupees fifteen lakh sixty eight thousand two hundred and fifty) in one case and of Rs. 78,34,195/- (rupees seventy eight lakh thirty four thousand one hundred and ninety five) in the other cases was paid by them.
3. On the above basis the appellants were issued show cause notices for confirmation of interest as also for imposition of penalty, which culminated into the impugned orders vide which penalty of an amount equivalent to duty amount was imposed upon M/s. Jay Jagdish Sugar and penalty of Rs. 1,00,000/- (one lakh) was imposed on M/s. Agasti SSK Ltd., and upon M/s. Niphad SSK Ltd. under the provisions of rule 26 of Central Excise Rules, 2001.
4. We have heard Shri S.R. Patankar, Id. consultant for the appellants and Shri S.V. Parelkar, Id. JDR for the Revenue.
5. The appellants are not challenging the confirmation of demand against them. They are only aggrieved with the imposition of personal penalties. In their appeal memo the appellants have accepted that there has been lapse on their part inasmuch as the requisite procedure was not followed and permission was not obtained for diverting the goods for home consumption which wee cleared originally for export. However, they have contended that the above lapse is procedural and technical in nature and does not warrant imposition of penalty upon them inasmuch as they had on their own paid the entire amount of duty before the issuance of the show cause notice.
6. We find that the Commissioner vide his impugned order has imposed penalties upon M/s. Jay Jagdish Sugar of amounts equivalent to the amounts of duties, which the appellants have paid themselves before issuance of the show cause notice. However, since there has been a lapse on their part, inasmuch as the requisite permission from the competent authority was not obtained before diverting the goods for home consumption we are of the view that the said appellant is required to be imposed with a certain amount of penalty. Taking into account the overall facts and circumstances we reduce the penalty from Rs. 78,34,195/- (rupees seventy eight lakh thirty four thousand one hundred and ninty five) in Appeal No. E/1201/2003 to Rs. 1,00,000/- (rupees one lakh) and from Rs. 15,68,250/- (rupees fifteen lakh sixty eight thousand two hundred and fifty) in Appeal No.E/1159/2003 to Rs. 50,00/- (rupees fifty thousand). But for the modification in the quantum of penalties in the above two appeals the same are otherwise rejected.
7. As regards the imposition of penalties upon the other two appellants we find that the sugar was cleared by them without payment of duty on the basis of the certificates issued by the superintendent. As such the said manufacturing unit were not responsible for the production of proof of exports and if the goods are not exported the entire responsibility rests on the merchant exporter. The observations made by the Commissioner that the said two appellants helped the exporter with intent to procure the goods for export and divert the same for home consumption without following proper procedure are not supported by any evidence on record so as to invite penal action against the said two appellants. Accordingly we set aside the imposition of personal penalties of Rs. 1,00,000/- (rupees one lakh) each imposed upon the said two appellants and allow their appeals with consequential relief. All the four appeals are disposed of in above manner. SP also get disposed off.