Custom, Excise & Service Tax Tribunal
M/S. Indian Oil Corpn. Ltd vs Cce-Haldia on 4 December, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. Ex.Ap.55/08
(Arising out of Order-in-Appeal No.37/HAL/2007 dated 28.09.2007 passed by the Commissioner(Appeal-I) of Central Excise, Kolkata.)
FOR APPROVAL AND SIGNATURE
HON'BLE SHRI S.S. KANG, VICE PRESIDENT
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
Authorative report or not?
3. Whether Their Lordship wishes to see the fair copy
of the Order?
4. Whether Order is to be circulated to the Departmental
Authorities?
M/s. Indian Oil Corpn. Ltd.
Applicant (s)/Appellant (s)
Vs.
CCE-HALDIA
Respondent (s)
Appearance:
Shri B.N.Chattopadhyay, Consultant for the Appellant (s) Shri B.B. Agarwal, Authorized Representative (Jt.CDR) for the Revenue CORAM:
Hon'ble Shri S.S.Kang, Vice President Date of Hearing/Decision :- 04.12.2009 Date of Pronouncement :- 04.12.2009 ORDER NO............................................................................
Per Shri S.S.Kang.
1. Heard both sides.
2. Appellant filed this Appeal against the imposition of penalty under 11AC of the Central Excise Act read with Rule 25 of Central Excise Rules as the Committee on Disputes allowed the Appellant to pursue the Appeal in respect of penalty only. The case of the Appellant is that they had paid excess duty for the month of March and April, 2004 and that excess duty has been adjusted in respect of the duty payable for the month of April, 2005 and the same is reflected in their monthly return. The Appellant's case is that from their returns the Revenue asked for differential duty payable for the month of April, 2005. Subsequently show cause notice was issued for demand of duty with interest and for imposition of penalty. Adjudicating authority confirmed the demand along with interest and imposed the equal amount of penalty under 11AC of the Central Excise Act.
3. The contention is that even in the show cause notice dated 04.10.2005 there is no allegation of fraud, misstatement of facts with intent to evade payment of duty as the Appellant regularly filed monthly returns showing payment of duty and there is no allegation of suppression of facts or fraud with intent to evade payment of duty which is essential under 11AC of Central Excise Act. The Appellant relied upon the decision of Hon'ble Supreme Court in the case of UOI Vs. Rajasthan Spinning & Weaving Mills - 2009 (238) ELT 3(S.C.).
4. The contention of Revenue is that Appellants are not entitled for taking suo motu credit of excess duty paid. The Revenue relied upon the larger Bench decision of Tribunal in the case of BDH Industries Ltd. vs. CCE(Appeals), Mumbai-I - 2008 (229) ELT 364(Tri.-LB). The contention of Revenue is also that when Revenue wrote a letter asking for deposit of differential duty the Appellant in response disclosed that the less duty has been paid as the Appellant had paid excess duty for the earlier period. Therefore the Appellants are liable for penalty under Section 11AC of Central Excise Act. Revenue also argued that in the monthly return for the month of April, 2005 the Appellant had not mentioned anything regarding adjustment of duty suo motu. So it is the clear intention on their part to evade payment of duty.
5. The Appellant challenged the penalty imposed under Section 11AC of Central Excise Act. As per the provisions of Section 11AC of Central Excise Act where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or for any willful misstatement or suppression of facts or contravention of any of the provisions of the Act or the Rules with intent to evade payment of duty the person who is liable to pay duty as determined under Sub-Section 2 of Section 11A shall be liable to pay a penalty equal to the amount so determined.
6. The Hon'ble Supreme Court in the case of UOI Vs. Rajasthan Spinning & Weaving Mills (supra) held that the application of Section 11AC would depend upon the existence or otherwise the conditions expressly stated in the Section, once the Section is applicable in a case the concerned Authority would have no discretion in quantifying the amount of penalty. In the present case I find that even in the show cause notice there is no whisper of fraud, collusion or any willful misstatement or suppression of facts with intent to evade payment of duty. In order to attract the provisions of Section 11AC of the it must be alleged in the show cause notice that the duty had not been levied or paid by reason of fraud, collusion or willful misstatement or suppression of facts or by reason of contravention of any provision of Act or Rules with intent to evade payment of duty. In the present case the excess duty paid and adjustment of the same was reflected in the monthly returns. In these circumstances I find merit in the contention of Appellant and in view of the above decision of Hon'ble Supreme Court the penalty imposed under Section 11AC is not sustainable hence set aside. Appeal is allowed.
(Pronounced and dictated in the open court.) sd/ (S.S.KANG) VICE PRESIDENT sm 4 Appeal No.Ex.Ap.55/08