Custom, Excise & Service Tax Tribunal
Maharashtra Solvent Extraction Pvt. ... vs Cc (Export) on 15 May, 2014
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. C/731 and 732/11 Mum
(Arising out of Order-in-Appeal No. 116 & 117 (Drawback)/2011(JNCH)/EXP 30-31 dated 29.07.2011 passed by the Commissioner of Customs (Appeals), Mumbai)
For approval and signature:
Honble Shri Ashok Jindal, 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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
Maharashtra Solvent Extraction Pvt. Ltd.
:
Appellant
Sanjay Agarwal
Versus
CC (Export)
Nhava Sheva
Respondent
Appearance Shri A.P. Kolte, Advocate For appellants Shri M.S. Reddy, Dy Commissioner (A.R.) For Respondents CORAM:
Shri Ashok Jindal, Member (Judicial) Date of Hearing : 15.05.2014 Date of Decision : 15.05.2014 ORDER NO.
Per Ashok Jindal The appellants are in appeals against the impugned order wherein the penalties on the main appellant has been imposed under Section 114A and on the Director under Section 114(iii) of the Customs Act, 1962.
2. Brief facts of the case are that the main appellant is manufacturer of De-Oiled Cake and an exporter. To manufacture the said De-oiled cake, they procure Hexane gas without payment of duty. After exportation of the goods, they claimed duty draw back available on the export goods. The claim was sanctioned. Later-on, it was revealed that the appellants have procured the Hexane gas without payment of duty and also availed draw back claim which was not admissible. Impugned proceedings were initiated and a show-cause notice was issued alleging that the appellants have wrongly and irregularly availed duty draw back therefore, they are liable to be penalized under Section 114A and 114(iii) of the Customs Act, 1962. Both the lower authorities confirmed the penalties on the appellants. Aggrieved by the said the appellants are before me.
3. Heard both sides.
4. The learned Counsel for the appellants submits that in this case the appellants are manufacturer of De-oiled cake which sometime were cleared in DTA as well as used in export. They have wrongly claimed the draw back on the export goods where they have not paid duty on Hexane gas. For that reason it cannot be held that they have taken draw back claim with an intention to take double benefit. As the appellants have already paid the duty draw back claim along with interest before the issuance of the show-cause notice therefore, penalty is not imposable on them. As show-cause notice itself alleges that they have claimed draw back wrongly. He further submits that the penalty on the appellant is not imposable under Section 114A as there is no demand of duty. In support of his contention he placed reliance on the decision in the case of Chowhan Exports Ltd. vs. CC - 2000 (121) ELT 833 (Tri.).
4.1 He further submits that the penalty imposed under Section 114(iii) of the Customs Act, 1962 is also not imposable on the Director of the Company as there is no proposal in the show-cause notice for confiscation of the impugned goods. As per the provisions of Section 114 of the Customs Act, 1962, penalty can be imposed if the goods are held liable for confiscation. In the circumstance, the impugned order quo imposing penalties on both the appellants are to be set aside.
5. On the other hand, the learned A.R. appearing for the Revenue supported the impugned order and submits that the penalties have been rightly imposed on the appellants for their act of availing draw back which they were not entitled to. It is further submitted that the act of appellants of the mis-declaration of fact to avail the drawback and without bringing the same to the notice of the department, proves suppression of facts. Therefore, the impugned order is to be upheld.
6. Considered the submissions made by both the sides.
7. On perusal of the show-cause notice, I find that the allegation against the appellants is that they have wrongly availed draw back claim. If an assessee is taken draw back claim wrongly, in that situation, it cannot be said that the assessee was having an intention to suppress the facts. Therefore, the facts of suppression are not proved as the show-cause notice itself alleges that draw back has been taken wrongly. I find force in the argument advanced by the learned Advocate that as per the Section 114A of the Customs Act, 1962, penalty can be imposed on account of non-payment, short payment or erroneously refunded duty but in this case duty is not demanded. The only allegation against the appellants is that they have availed draw back claim wrongly. Therefore, relying on the decision of this Tribunal in the case of Chowhan Exports Ltd. (supra), penalty under Section 114A of the Customs Act, is not imposable on the main appellant.
7.1 Further, I find that in the show-cause notice there is no proposal for confiscation of the impugned goods. Therefore, penalty under Section 114(iii) is not imposable.
8. With these observations, I hold that the penalties on both the appellants are not imposable. Accordingly, penalties imposed on the both the appellants are set aside. The impugned order is modified to this extent. With these terms, the appeals are allowed.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk ??
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