Customs, Excise and Gold Tribunal - Bangalore
Commissioner Of Central Excise vs Computer Connection on 1 April, 2003
Equivalent citations: 2003(162)ELT373(TRI-BANG)
ORDER G.A. Brahma Deva, Member (J)
1. This is an appeal filed by Revenue.
2. The Revenue has come in appeal on the ground that the Commissioner (Appeals) was not justified in dropping the penalty imposed by the Joint Commissioner.
3. On going through the impugned order, we find that the point at issue has been properly analysed by the Commissioner (Appeals) as per Para 8 of the impugned order which reads as under -
"8. (i) I have examined the position. The Joint Commissioner has rightly set aside the demand of duty on the ground of limitation i.e. Show Cause Notice is not issued within 5 years from the relevant date under the proviso to Section 11A(1) of Central Excise Act, 1944. The appellants have forcefully argued that when the demand is set aside on the ground of time-bar i.e. limitation, imposition of penalties are not justified and cited various judgments in their report. I find that the Hon'ble Supreme Court of India in the case of Collector of Central Excise v. H.M.M. Limited reported in 1995 (76) E.L.T. 497 (SC) held that penalty not imposable unless Department is able to sustain its demand show cause notice which was under challenge on the ground of limitation - Rules 9(2) and 173Q of Central Excise Rules, 1944. I also find that the Hon'ble High Court of Judicature of Allahabad in the case of H. Guru Investment (North India) Pvt. Ltd. v. CEGAT, New Delhi reported in 1998 (104) E.L.T. 8 (All.) held that "Penalty - Demand notice and notice imposing penalty issued to the Petitioner Tribunal cancelled the demand notice on the ground of being time-barred but kept the amount of penalty to be paid - Penalty not leviable when demand of duty itself is set aside. Article 226 of Constitution of India - Section 11A of Central Excise Act, 1944 - Rule 173Q of Central Excise Rules, 1944." I also further find that the Hon'ble Tribunal in the case of Uttam Steels Ltd., v. Commissioner of Central Excise and Customs reported in 1999 (111) E.L.T. 277 (Tribunal) held that "penalty is not sustainable if the connected demand is set aside on the ground of limitation - Rule 173Q of Central Excise Rules, 1944." I find that the case of M/s. Computer Connection, Vijayawada, the appellants, is squarely covered by the above cited decisions. Following the ratio of the above case laws, I set aside the penalty of Rs. 1,20,000/- imposed on the said appellants.
(ii) As regards the imposition of penalty of Rs. 41,400/- on Shri K.V. Sivarama Prasad, the Chief Executive Officer under Rule 209A of Central Excise Rules, 1944 is concerned, I find that unless the specific allegations are set out in Show Cause Notice, and there is elaboration as to how ingredients of Rule 209A are satisfied, penalty under Rule 209A is not sustainable and further mens rea is an essential ingredient for imposing penalty under Rule 209A ibid. I find that the Department has failed to bring any evidence on record to show that the appellant knew or had reason to believe that the impugned goods are liable to confiscation under Central Excise Act, 1944 or the Central Excise Rules. In the light of the above discussions and following the ratio of the case laws cited by the appellant i.e. Shri K.V. Sivarama Prasad, as referred to in para 7(b) above, I hold that the imposition of penalty of Rs. 41,400/- on him is not justified in the facts and circumstances of the case. The same is set aside."
4. On going through the facts and circumstances of the case and taking into consideration of the fact that the point at issue has been properly analysed by the Commissioner (Appeals), we do not find any infirmity in the impugned order. In the result, the appeal is hereby dismissed.