Custom, Excise & Service Tax Tribunal
M/S. Nirmal Inductomelt Pvt. Ltd vs Commissioner Of Central Excise,Jaipur on 11 June, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066. BENCH-,,,,,SM Date of Hearing/Decision:11.06.2010 Excise Appeal No.E/1196-1197/08-SM [Arising out of Order-in-Appeal No.59-60 (RKS) CE/JPR-II/2008 dated 17.04.2008 passed by the Commissioner (Appeals), Jaipur]. M/s. Nirmal Inductomelt Pvt. Ltd. Shri Bharat Bhushan Malik Appellants Vs. Commissioner of Central Excise,Jaipur Respondent
Present for the Appellant :Shri.Bipin Garg, Advocate Present for the Respondent:Shri.I. Baig, SDR Coram: HONBLE MR.DN.PANDA, JUDICIAL MEMBER ORDER NO. _______________ DATED:11.06.2010 PER: D.N.PANDA Ld. Counsel submits that while filing the appeal there was a cause. In due course of time that cause has vanished for which the appeal may be disposed invoking third proviso to section 11AC of Central Excise Act 1944 since the duty has been paid at the time of investigation itself. He also cites the decision of the Honble High Court of Delhi in the case of K.P. Pouches (P) Ltd. vs. Union of India reported in 2008 (228) ELT 31 (Delhi) which permits concessional penalty following the statutory guide lines under section 11AC of Central Excise Act 1944. While proposition of the ld. Counsel is to reduce the dispute in the manner indicated as above, Revenue objects submitting that the case being foolproof case of clandestine removal, entire penalty shall be imposable following the decision in the case of Union of India vs. Rajasthan Spinning & Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.).
2. There is no difficulty to understand that the penalty is exigible, while the duty liability was not disputed. But once the penalty is exigible that is also subject to third proviso to section 11AC of the Central Excise Act, 1944 read with the ratio laid down by the Honble High Court of Delhi in the case of K.P. Pouches (P) Ltd (supra). Penalty became sustainable following Rajasthan Spinning Mills case, in the present case. But quantum can be decided on the basis of statutory provision which plays its role. The appellant company is entitled to the concessional penalty which shall be limited to 25% to duty amount involved according to statutory provision. There being no dispute about the duty liability, but only on the quantum in the manner indicated above, the order passed by the ld. Authority below is confirmed in so far as the duty demand is concerned, except modifying the quantum of penalty in respect of the company, directing the penalty to be limited to 25% of duty element in this case. Consequently Appeal No. E-1196/08 is partly allowed modifying the first appellate order.
3. So far as appeal of Shri Bharat Bhushan is concerned, that is relating to levy of penalty of Rs.1,00,000/- attributing his role to the commitment of the offence. Entire appellate order no where discloses that the offence committed was within the conscious knowledge of this appellant nor also the order discloses whether he was responsible for commitment of the offence and that was done under his instructions. Contumacious conduct of the director is not coming out from record. Once mensrea does not come out, mere acceptance of discrepancy at the investigation stage shall not be commitment of offence. No doubt the Director agreed to work out the discrepancy and also the duty element was deposited on such calculation. Mere working of the discrepancy does not amount to the confession of the guilt nor commitment, unless the commitment is brought to record showing his active involvement. Penalty proceeding being quasi criminal in nature, the charge framed calls for evidence of conscious abatement to establish the same. When such an element is absent, this appellant succeeds. Therefore, there shall be no penalty on the appellant Shri Bharat Bhusan Malik, Diredtor. The appeal No.E/1197/08 is allowed.
[Dictated & Pronounced in the open Court].
(D.N.PANDA) JUDICIAL MEMBER Anita