Custom, Excise & Service Tax Tribunal
Kedarnath Dubey vs Commissioner Of Central Excise, Nashik on 24 February, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No.E/669, 670,776,710,668/2011 and Appeal No. E/672, 673,674,709/2011 (Arising out of Order-in-Appeal No. AKP/NSK/14 to 21/2011 dt. 31.01.2011 And OIA No. AKP/NSK/22 to 29/2011 dt. 31.1.2011 passed by the Commissioner (Appeals) Central Excise & Customs, Nashik ) For approval and signature: Honble Shri Ramesh Nair, Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No
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 : No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
=====================================================
Kedarnath Dubey
Pramod Singh
Al-Karim Scrap Traders Pvt. Ltd.
Devendra Pal Tank
Parmeshwari Steels
Prameshwari Steels
Kedarnath Dubey
Pramod Singh
Devendra Pal Tank
:
Appellant
VS
Commissioner of Central Excise, Nashik
:
Respondent
Appearance
Shri V.S. Sejpal, Shri Ashok Kumar Singh,
Shri Mahesh Raichandani, Advocates for Appellant
Shri V.K.Shastri, Asstt. Commr. (A.R) for respondent
CORAM:
Honble Shri Ramesh Nair, Member (Judicial)
Date of hearing : 24/02/2016
Date of decision: 24/02/2016
ORDER NO.
These appeals are directed against the Order-in-Appeal No. AKP/NSK/14 to 21/2011 dt. 31.01.2011 and OIA No. AKP/NSK/22 to 29/2011 dt. 31.1.2011 passed by the Commissioner (Appeals) Central Excise & Customs, Nashik.
2. The issue involved in the present case is that if the main appellant, against whom, the demand of excise duty, interest and penalty were proposed, discharge the liability of duty, interest and 25% of penalty within one month from the date of show cause notice whether the proceedings against Co-noticees in the same show cause notice shall also stand concluded and whether they are not liable for penalty under Rule 26 of Central Excise Rules, in terms of proviso to Sub-section 2(2) of Section 11A of Central Excise Act. The Ld. Commissioner (Appeals) in his orders contended that as per the first proviso to Sub-Section (2) of Section 11A, the proceedings in respect of such person and other person to whom notice were served under Sub-section (1) shall be deemed to be conclusive. In the show cause notice the notice under Sub-section (1) demanding duty was issued only to the main assessee and not to the co-noticees. On the other co-notice the penalty under Rule 26 of Central Excise Rules 2002 was proposed by way of the same show cause notice. Accordingly, the Ld. Commissioner held that the proceedings against the main assessee against whom the demand of duty was proposed can only be conclusive and not in respect of other co-noticees. Aggrieved by the impugned order the appellants are before me.
3. Shri Vinay Sejpal, Shri Ashok Kumar Singh and Shri Mahesh Raichandani, Ld. Counsels appeared for the appellants. Shri Ashok Kumar Singh submits that the Ld. Commissioner (Appeals) has wrongly interpreted the first proviso to Sub-section (2) of Section 11A for the reason that the only proviso under which the show cause notice can be issued is Section 11A (1). Even, the other co-noticees were proposed to be imposed with a penalty under Rule 26 of Central Excise Rules, 2002, the show cause notice was issued only under Section 11A(1), therefore it cannot be interpreted that only such notice against whom duty demand was raised is to be treated as such person to whom the show case notice was issued under Section 11A(1) of the Act. The other Co-noticees to whom the penalty under Rule 26 was proposed, the show cause notice to these persons also were under Section 11A (1) only, therefore when the main assessee against whom the duty demand was proposed, pays duty, interest and 25% penalty, the proceedings against such person as well as all other persons involved in the same show cause notice should stand concluded, no penalty can be imposed on other co-noticees. In support of this submission the Ld. Counsels placed reliance on the following judgments:
(i) Raman Gandhi Vs. Commissioner of Central Excise, Delhi 2015 (323) E.L.T. 579 (Tri.Del.)
(ii) Commissioner of Central Excise, Raipur Vs. Abir Steel Rolling Mills 2013 (296) E.L.T. 90 (Tri.-Del.)
(iii) Commissioner of C. Ex., Raipur Vs. Gopal Prasad Sultania 2013 (293) E.L.T. 271 (Tri.Del.)
(iv) Guardian Castings Pvt. Ltd. Ravindra C Aggarwal Vs. Commissioner of Central Excise, Thane-I 2015-TIOL-396-CESTAT-MUM
(v) Tikam P. Bhojwani Vs. Commissioner of Central Excise, Ahmedabad 2011 (272) E.L.T. 88 (Tri-Ahmd.)
(vi) Commissioner of Central Excise & Customs, Aurangabad, Nashik-II Ambika Waste Management Pvt. Ltd. & Others Order No. A/3778-3781/15/SMB dt. 23.11.2015
(v) Commissioner of C.Ex., Raipur Vs. Jai Ambey Metal Works Pvt. Ltd.
2013 (295) E.L.T.453 (Tri.-Del.)
(vi) Commissioner of Central Excise, Vapi Vs. Technovinyl Polymers Limited 2013 (298) E.L.T. 50 (Tri.-Ahmd.)
(vii) Commissioner of C. Ex., Raipur (C.G.) Vs. Jay Prakash Agarwal 2013 (297) E.L.T. 554 (Tri.-Del.)
(viii) Commissioner of C. Ex., Chandigarh-I Vs. Vikas Garg 2014 (306) E.L.T. 94 ( P & H)
4. On the other hand, V.K.Shastri Ld. Asstt.Commr.(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that the following judgments this Tribunal has taken a contrary view (1)Commissioner of Central Excise Raipur Vs. Shri Anand Agarwal & Others 2013-TIOL-26-CESTAT-DEL (2) Shri Ghanshyamdas C. Goyal Vs. Commissioner of Central Excise, Aurangbad 2015-TIOL-756-CESTAT-MUM.
5. I have carefully considered the submissions made by both the sides. I find that the appellants sought waiver of penalty imposed under Rule 26 of Central Excise Rules, 2002 on the ground that the main noticee in the show cause notice against whom duty, interest and penalty was proposed have paid duty, interest and 25% of penalty within one month from the date of show cause notice. The proceedings against the present appellant should also stands concluded along with the main assessee. I find that on the very same legal issue various Benches of this Tribunal and also Honble P & H High Court has held that once the main assessee pays duty, interest and 25% of penalty within one month of the show cause notice other co-noticees against whom the penalty under Rule 26 was proposed, proceedings their against shall also be concluded. Accordingly, no penalty can be imposed in terms of proviso to Section 11A(2) of the Central Excise Act. The operative portion of the various judgments are reproduced below:
(i) In the case of Jai Ambey Metal Works Pvt. Ltd. (supra) held that-
7.In the present? case, the Revenues main contention is that the proceedings under Section 11A(2) of Central Excise Act are not concluded. I find that the Commissioner (Appeals) in the impugned order held that duty along with interest and 25% of penalty has been paid within the stipulated period under Section 11AC of the Act, 1944. This finding is not under challenge in the appeal. Therefore, I find no merits in the contention of the Revenue that proceedings under Section 11A(2) of the Central Excise Act, 1944 are not concluded. Further I find that the Tribunal in the case of Nirmal Kumar Agrawal, Director of the respondent-company against whom the proceedings were initiated with the same show cause notice vide order dated 11-6-2012 in Appeal No. E/978/2010 held that proceedings under Section 11A(2) are to be treated as closed.
(ii) In the case Deepak Patel (supra) held that-
2. The counsel for the respondent submits that as per the provisions of the first proviso to Section 11A(2) when a case is against an assessee is settled under Section 11A(1A), no further proceedings is maintainable against any other person to whom notice is issued under Section 11A(1). I find that the provisions in the said proviso is very clear and decisions relied upon by Revenue are not with reference to a situation where payments as envisaged under the provisions of Section 11A(1A) was made. Therefore I do not find any merit in the argument of Revenue and the appeal filed by Revenue is rejected.
(iii) In the case of Technovinyl Polymers Limited(supra) held that-
6.?In my considered view, the apprehension of the Revenue seems to be misplaced to that extent that the provisions of Section 11A(1A) of Central Excise Act, 1944 read with proviso to sub-section (2) of the said Section 11, very clearly indicates that if an assessee discharges the entire duty liability along with interest and 25% of the amount of duty liability, then the proceedings comes to an end. Provisions also indicate that there is no need for issuance of show cause notice. It is pointed out by the learned DR that in this case, the duty liability has been discharged after the issuance of show cause notice. In my view, the benefits which are available to an assessee prior to issuance of show cause notice should also be extended after the issuance of show cause notice, if liability is discharged before the adjudication order. Be that as it may, the issue seems to be covered by the Division Bench decision of this Tribunal in the case of Sonam Clock Pvt. Limited & Others v. CCE, Rajkot - 2011-TIOL-1893-CESTAT-DEL = 2012 (278) E.L.T. 263 (Tri.-Ahmd.) (wherein I was one of the Member). I do not find any merits in the grounds raised by the Revenue that assessee may seek refund of the amount as that the entire order-in-original is set aside as the first appellate authority has considered the extension of benefits of Section 11A to the assessee only on the ground that he has paid the amount in full. If the assessee would not have paid this amount, this benefit would not have been extended to him.
7.?In my view, the issue is covered by the decision of the Division Bench of the Tribunal in the case of Sonam Clock Pvt. Limited (supra) and I find that impugned order is correct and legal and does not suffer from any infirmity.
8.?Appeal rejected.
(iv) In the case of Vikas Garg (supra) held that-
6.?We do not find any merit in the said argument. Once the proceedings against the firm stand concluded, penalty proceedings against partners of the firm cannot continue as Rule 26 of the Rules is not an independent provision but has to be read with Section 11A of the Act. The firm has satisfied the due of the Revenue, therefore, the imposition of penalty under Rule 26 of the Rules are not justified.
7.?In view of above, both the appeals are dismissed.
From the above judgments of various Benches of the Tribunal as well as the judgment of Honble High Court of P &H in the case of Vikas Garg(supra), the issue involved in the present appeal has been settled and according to the rulings, proceeding of all the noticees to whom the show cause notice was issued shall stand concluded if the main assessee discharge the duty, interest and 25% penalty within one month of the show cause notice. As regard the judgment cited by the Ld. A.R. in case of Shri Anand Agarwal & Others (supra) and Shri Ghanshyamdas C. Goyal (supra). I observe that in the case of Shri Anand Agarwal & Others (supra) all the other judgments as well as judgement passed by Honble High Court of P & H were not referred/considered. Therefore the judgment of Shri Anand Agarwal & Others (supra) is distinguished. As regard, the judgment in Shri Ghanshyamdas C. Goyal (supra), no one appeared on behalf of the appellant and on behalf of Revenue, the Ld. A.R. relied upon only the judgement of Shri Anand Agarwal & Others (supra). The Tribunal following Shri Anand Agarwal & Others (supra) case passed the order without having seen all other judgment of Tribunal as cited above and without considering the judgment of Honble High Court of P & H in the case of Vikas Garg. Therefore the judgment of Shri Ghanshyamdas C. Goyal (supra) also stands distinguished. In view of my above discussion, I am of the considered view, that all the appellants are entitled for the immunity as per proviso to Section 11A(2) and accordingly they are entitled for the waiver of penalty imposed on them under Rule 26 of the Central Excise Rules, 2002. The appeals are allowed in the above terms.
(Pronounced in court ) (Ramesh Nair) Member (Judicial) SM.
2Appeal No.E/669,670,776, 710,668/2011 and Appeal No. E/672,673,674,709/2011