Customs, Excise and Gold Tribunal - Mumbai
Sterlite Industries (India) Ltd. vs Commr. Of C. Ex. & Cus., Surat-Ii on 27 February, 2002
Equivalent citations: 2002(143)ELT682(TRI-MUMBAI)
ORDER G.N. Srinivasan, Member (J)
1. Appeals taken up for disposal after waiving deposit.
2. In these cases, the assessee manufactured copper rods. The goods weighting 8816 kg. valued at Rs. 8,68,377/- were manufactured from 18-3-1999 to 26-3-1999. On these goods being sold, they were being transported on 26-3-1999. It appears that even though invoice refers to debit entry in RG 23A Part II, the same was not effected in the statutory register. It would appear the person in-charge of the same Mr. K.A.K.V. Rao was on sick leave on the concerned day. It transpires that he has intimated the same to the office. The fact remains that the relevant statutory records were not properly completed regarding clearance of the goods represented by invoice Nos. 2025 to 2040, 2041, 2042 to 2046, dated 26-3-1999. On intelligence of the department, goods were inspected and seized. The proceedings were initiated and the assessee as well as the other appellants were charged with violation of Rule 173Q, Section 11AC and 209A. After hearing the parties and considering the replies, the Commissioner of Central Excise and Customs, Surat-II passed the impugned order whereunder he confirmed the duty which is already paid and imposed penalty of Rs. 28,75,217/- under Rule 173Q of the Central Excise Rules read with Section 11AC of the Central Excise Act. As far as the penalty on the other appellants is concerned for violation of Rule 209A of the Central Excise Rules, S.L. Ravi, Rs. 2 lakhs, Tarun Jain Rs. 5 lakhs, Lakhvant Singh Makhan Singh Rs. 5000/-, Rajesh R. Raje Rs. 1 lakh, Kushvinder Singh Sukh-dev Singh Rs. 20,000/- was imposed. By the said order, the Commissioner fixed the fine of Rs. 2,60,513/- on the goods and truck at Rs. 90,000/-, plant and machinery at Rs. 5 lakhs. Bank guarantee given by the company in respect of the seized goods have been ordered to be encashed.
3. In the appeals filed by the appellants it is contended that the Commissioner had not discussed about the culpability of the officials in terms of Rule 209A of the Central Excise Rules. It is further contended that on the facts of the case the entry which has been reflected in the invoice would show the bona fides of the importer inasmuch as there is no intention to violate the provisions of Central Excise Rules. It is further emphasised that when the person in-charge namely Rao came back from leave the measures of filling up the entry in RG 23A Part II were finalised. It is due to the extraordinary circumstances of illness of the person concerned, these things have happened and in any event it is argued that the imposition of penalty on Tarun Jain, who is the director of the assessee company at Mumbai can never be imposed because he was not at the place of occurrence at that time. As far as the imposition of penalty on the truck owners and drivers are concerned, they do not have knowledge or reason to believe that the goods were that they were transporting were liable to confiscation in terms as provided under Rule 209A of the Central Excise Rules. Consequently confiscation of the truck which carried the goods cannot be sustained and will be set aside.
4. Ld. DR adopts the reasoning in the impugned order.
5. We have considered the circumstances. When we look into the facts of the case, it is clear that if the assessee was interested in violating the provisions of Central Excise Rules; he would not have mentioned the relevant entry in the invoice. The facts would reveal that on the fateful day the incharge of the Central Excise fell sick, therefore these things have happened. In this connection, it will be useful to refer to the judgment of the Tribunal in Z.U. AM v. CCE - 2000 (117) E.L.T. 69. The Tribunal dealing with the question of liability of the employees under Rule 209A of the Central Excise Rules noted as follows :
"Commissioner proceeded against the appellant under Rule 209A, which can apply to a person who dealt with the contraband article, not as manufacturer. Appellant had no dealings with the contraband article otherwise than in his official capacity as an employee of BHEL, the manufacturer. So, by no stretch of imagination can the appellant fall within the purview of Rule 209A of the Central Excise Rules. Therefore, the Commissioner was clearly in error in thinking that penalty contemplated by Rule 209A could be imposed on the appellant who was only an employee of the manufacturer, namely BHEL."
6. If we look into the observations of the Tribunal, it will be clear that the proceedings initiated against the employees and the directors are not correct inasmuch as they do not have the knowledge or dealing with the goods which are concerned. As far as the truck owners and drivers are concerned, we hold that it is for stronger reasons that they would not have the knowledge or having reason to know that the goods which they were transported have contravened the provisions of Central Excise Rules.
7. We now turn to the penalty imposed on the manufacturer. Its contention was that there was no intent to evade payment of duty. The liability to imposition of penalty is not disputed but extenuating to circumstances warrant leniency are advanced. In our opinion, these circumstances exists in this. case. The fact that K.A.K.V. Rao, officer excise took leave on ground of illness is established by his application. The company therefore had to make use of the service of someone else to attend to the function that he performs relating to making entry in the Personal Ledger Account and Modvat account. It is therefore possible that the failure to make the debit entry in the RG 23A register could have taken place without any deliberate intent on the part of the company. The statements of the employees of the company whom the Commissioner relies upon, only contain admission that the goods were cleared without payment of duty. They did not indicate the existence of a deep-seated line of conspiracy. In these circumstances, we reduce the penalty on the company from Rs. 28 lakhs to Rs. 3.5 lakhs. We are of the view that the redemption fine is already lenient and does not warrant reduction. We however set aside the confiscation of plant and machinery.
8. Appeal E/662/2001 allowed in part. Other Appeals allowed.