Custom, Excise & Service Tax Tribunal
Aurangabad vs Videocon Appliances Ltd on 15 September, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
APPEAL NO: E/691/2004
[Arising out of Order-in-Appeal No: RK/166/Aur/2003 dated 28/11/2003 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur.]
For approval and signature:
Honble Shri P.R. Chandrasekharan, Member (Technical)
1.
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
:
No
2.
Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
:
Yes
3.
Whether Their Lordships wish to see the fair copy of the Order?
:
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
:
Yes
Commissioner of Central Excise & Customs
Aurangabad
Appellant
Vs
Videocon Appliances Ltd.
Respondent
Appearance:
Shri Sanjay Kalra, Authorised Representative for the appellant Shri Arun Mehta, Advocate for the respondent CORAM:
Honble Shri P.R. Chandrasekharan, Member (Technical) Date of decision: 15/09/2011 ORDER NO: ____________________________ Per: P.R. Chandrasekharan:
This is a departmental appeal filed against the Order-in-Appeal No: RK/166/Aur/2003 dated 28/11/2003 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur. In the impugned order the appellate authority has upheld the confirmation of duty demand and interest and also the redemption fine imposed by the lower adjudicating authority. He has reduced the penalty from Rs. 34,596/- to Rs. 15,000/-.
2. The facts of the case are as under:
2.1. The respondent in this appeal, M/s. Videocon Appliances Ltd., Aurangabad are manufacturers of domestic electrical appliances falling under Chapters 84 and 85 of the Central Excise Tariff Act. The respondent brought into their factory duty paid goods for reprocessing under Rule 173H by filing the D-3 intimation and after following the procedure. On 31/05/1998 the respondent cleared 31 numbers of refrigerators whose models were different from the ones that were brought for reprocessing. The consignments were intercepted by preventive officers who noticed that the goods under clearance were different from what were brought for reprocessing. Accordingly, a show cause notice dated 27/11/998 was issued demanding duty of Rs. 34,596/- and also proposing to invoke penal proceedings. The respondent on 01/06/1998 itself paid the duty demanded of Rs. 34,596/-. The respondent submitted that the mistake has occurred in the packing section of the respondents factory and was due to the change of staff due to change in shift.
2.2. The notice was adjudicated upon vide order dated 20/08/1999 wherein the adjudicating authority confirmed the duty demand of Rs. 34,596/- along with interest thereon and imposed an equivalent amount of penalty on the respondent under Section 11AC of the Central Excise Act, 1944. The goods, which were seized were held liable to confiscation and allowed to be redeemed on payment of redemption fine of Rs. 15,000/-.
2.3. The respondent preferred an appeal before the Commissioner (Appeals) who upheld the order of the adjudicating authority. However, he reduced the penalty of Rs. 34,596/- to Rs. 15,000/-. While considering the reduction the appellate authority noticed that the mistake has happened due to changeover of the shift and the persons in the packing section utilised the boxes of returned refrigerator models for packing the new models, the size of the two being similar. Since the respondent had discharged the duty liability before the issue of the show cause notice, he imposed a lower amount of penalty in view of the apex courts judgment in the case of Hindustan Motors vs. CCE, Aurangabad 2003 (153) ELT A304 (SC). The department is in appeal against the impugned order.
3. The only ground in the appeal is that the appellate Commissioner could not have reduced penalty once the original authority imposed equivalent amount of penalty under Section 11AC. The counsel for the respondent submits that the mistake committed by the respondent was bona fide and this has been explained to the adjudicating and appellate authorities and the appellate authority was competent to reduce the penalty.
4. I have carefully considered the above submissions. The show cause notice has proposed penalty under Rule 173Q of the Central Excise Rules, 1944 and also under the provisions of Section 11AC of the Central Excise Act, 1944. The lower adjudicating authority imposed equivalent penalty under Section 11AC which was challenged by the respondent before the lower appellate authority. The lower appellate authority, after considering the facts and circumstances of the case, reduced the penalty from Rs. 34,596/- to Rs. 15,000/-. Since for imposition of penalty both under Rule 173Q and Section 11AC has been proposed, it is not necessary that equivalent penalty has to be imposed. Mandatory penalty is imposable only in the case involving fraud, collusion, suppression, willful misstatement of facts or contravention of the provisions of the Act/Rules with an intent to evade payment of duty. If these elements are not present, it is not mandatory to impose equivalent amount of penalty. In the instant case, the respondent has explained the mistake which occurred in the packing section due to change over of staff between the shifts. Further, it is on record that all the transactions have been duly registered and accounted for in the books of accounts maintained by the respondent. That being the position, the elements which should be present for imposing mandatory penalty does not appear to exist in the facts and circumstances of the present case and accordingly the learned appellate authority has imposed a lower amount of penalty.
5. I do not find any infirmity in the reasoning adopted by the lower authority. Accordingly, I uphold the impugned order and dismiss the departmental appeal as devoid of merits.
(Operative part Pronounced in Court) (P.R. Chandrasekharan) Member (Technical) */as 6