Custom, Excise & Service Tax Tribunal
M/S Govind Agencies Ltd vs Commissioner, Central Excise & Service ... on 22 April, 2015
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No.E/571,572,743-751,758,762-765/2007
[Arising out of OIO-22/MP/2006, dt.26.02.2007, passed by Commissioner of Central Excise & Service Tax, Surat-II]
1. M/s Govind Agencies Ltd,
2. M/s Shubhra Priyanka Investments (P) Ltd,
3. M/s Chaitali Textile,
4. M/s Anil Textile,
5. M/s Himani Textiles,
6. M/s Bhavin Textile,
7. M/s Harsh Textile,
8. M/s Neeta & Co.,
9. M/s Bombay Bottling Centre P. Ltd.,
10. M/s Shah Textile,
11. M/s Hemen Textile,
12. Shri Ketan Mahendrabhai Shah,
13. M/s Viscose Distributors,
14. M/s Himesh Corporation,
15. M/s Ami Corporation,
16. M/s Raviraj Textiles Appellants
Vs
Commissioner, Central Excise & Service Tax, Surat-II Respondent
Represented by:
For Appellant: S/Shri J.C. Patel, Dhaval Shah, R.K. Jain - Advocates For Respondent: Shri K. Sivakumar, Authorised Representative For approval and signature:
Honble Mr. P.K. Das, Member (Judicial) Honble Mr. H.K. Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see the No 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 of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL) Date of Hearing/Decision:22.04.2015 Order No.A/10357-10372/2015, dt.22.04.2015 Per: P.K. Das
1. These appeals are arising out of a common order and therefore, all are taken up together for disposal.
2. The relevant facts of the case, in brief, are that M/s Navpad Textile Industries Ltd (Dyeing Division) (in short the Company) was engaged in processing of Dyed Polyester Filament Yarn. It has been alleged in the Show Cause Notice dt.09.04.2003 that the said Company cleared the Dyed Yarn to the various traders without payment of Central Excise duty. By the impugned Adjudication order, the Commissioner of C.Ex & Customs, Surat-II confirmed the demand of duty of Rs.91,99,802.00 alongwith interest and imposed penalty of equal amount of duty on the said Company (M/s Navpad Textile Industries Ltd.) It has also imposed penalties on the various traders ranging from Rs.5,000.00 to Rs.1,60,000.00, a penalty of Rs.23 lakhs imposed on the Director of M/s Navpad Textile Industries Ltd, who are Appellants herein. The Tribunal by Stay Order No.S/1313 to 1329/WZB/AHD/2007, dt.27.11.2007 directed the said Company to pre-deposit a sum of Rs.50 lakhs for hearing appeal and waived the pre-deposit of penalties on other applicants. By Order No.A/2794/WZB/AHD/2008, dt.04.12.2008, the Tribunal dismissed the appeal of M/s Navpad Textile Industries Ltd for non-compliance of the stay order under Section 35F of the Central Excise Act, 1944.
3. Shri J.C. Patel, and Shri Dhaval Shah, learned Advocates are appearing on behalf of the Appellants, except Shri Ketan M. Shah. Shri Rakesh Jain, learned Advocate is appearing on behalf of Shri Ketan M. Shah, Director of the said Company seeks adjournment on the ground that he could not contact with his client. We find that all the Appellants are appearing in this matter and therefore, no adjournment is granted to Shri Ketan M. Shah.
4. After hearing both the sides and on perusal of the records, we find that the Appellant had purchased the Dyed Fabrics from the said Company on the basis of challans and bills. It is also seen from the records that the statements of the traders were recorded. In this context, we refer the statement dt.12.03.2003 of Shri Ajay H. Shah, Authorised Signatory of M/s Hemen Textile, where he stated that they were engaged in the manufacturing of Grey Fabrics and they purchased Polyester Died Yarn/Textured Yarn/Twisted Yarn for manufacture of Grey Fabrics from the said Company. He confirmed that they have received the goods only under the cover of delivery challans and Bills. He produced the Xerox copies of delivery challans and bills to the investigating officer. It is noted that all statements are mostly similar in nature.
5. On perusal of the Adjudication order, we find that the Appellants had purchased the goods on the basis of challans and bills issued by the said company. The learned Authorised Representative for the Revenue drew the attention of the Bench to Para 74 of the impugned order. It is observed by the Adjudicating authority that the Appellant received the finished goods from the said Company under the cover of delivery challans/bills without the cover of Central Excise invoices and without payment of duty. They also confirmed that the invoices issued in the name of their Company were forged/parallel invoices. The learned Advocates appearing on behalf of the Appellants strongly opposed the findings of the Commissioner. It is submitted that there is no material available that the Appellant confirmed that they have received the goods on forged/parallel invoices. In this context, the learned Authorised Representative submits that the supplier of the material, the said Company admitted in his statement that he has issued the parallel invoices. We find that there is no material available that the Appellant had received the goods on the basis of parallel invoices. It is evident from the statements of the appellants that they purchased the goods accompanied with the challans, bills/invoices.
6. The Tribunal in the case of Jaiprakash R. Jalan Vs Commissioner of C.Ex., Ahmedabad 2007 (207) ELT 226 (Tri-Mum.) held that the purchaser of clandestinely removed goods under commercial invoice not having knowledge about non-duty paid character of goods, is not liable to penalty, especially as he was not a Central Excise assessee and not legally obliged to issue Central Excise invoices and penalty under Rule 209A of erstwhile Central Excise Rules, 1944. Rule 26 of Central Excise Rules, 2002 was set aside. The relevant portion of the said decision is reproduced below:-
5.? After appreciating the submissions made by both sides, we find that the imposition of penalty upon both the appellants is mainly on the ground that Central Excise invoices, showing the duty paid character of the fabrics, were not received by the said appellants. However, we find that for imposing penalties under Rule 209A of the erstwhile Central Excise Rules, 1944, the criteria that the person dealt with the excisable goods with the knowledge or belief that the goods liable to confiscation, is required to be satisfied. We find absence of such evidence on record. There is nothing either in the statements of the accused persons or any other independent evidence reflecting any knowledge on the part of these two appellants to show that they were aware of the fact that M/s. Anu Textiles Mills Pvt. Ltd., was clearing the fabrics without payment of duty, neither has it been shown to us that the said appellants was beneficiary of the clandestine activities of the processor. In the absence of such evidence, we are of the view that penalties imposed upon the said two appellants cannot be upheld. Accordingly, we set aside the impugned order so far as the same relates to imposition of penalties upon the two appellants and allow their appeals with consequential relief to them.
7. We have already stated that there is no material available on record that the Appellants had knowledge of the non-duty paid character of the goods. It is seen from the records that the Appellant as per the normal trade practice, purchased the goods with bills and challans from the said company. In view of that, we find that the imposition of penalty under Rule 209A of Central Excise Rules, 1944 on the Appellants/Traders cannot be sustained.
8. Regarding the imposition of penalty of Rs.23 lakhs on Shri Ketan M. Shah, Director, the learned Authorised Representative for the Revenue, drew the attention of the Bench to Para 77 of the impugned order. It is seen that the Appellant in his statements dt.08.06.2001 and 29.03.2003 had categorically admitted that they were preparing parallel invoices on computer and quantity of goods mentioned therein were sold without payment of duty, without accounting of the same in their Central Excise statutory records. He also admitted that he had knowingly indulged himself in illicit clearance and removal of Dyed Polyester Yarn without payment of duty, without issuing Central Excise invoice and without accounting for in statutory records. We find that the Appellant was directly involved in the clandestine removal of the goods. It is also noted that that the Appellant Company had not complied with the stay order passed by this Tribunal. Hence, the imposition of penalty on Shri Ketan M. Shah is justified.
9. In view of above discussion, we set aside the penalties on all the appellants, except the penalty on Shri Ketan M. Shah, Director of the said Company is upheld. Accordingly, all the appeals filed by the Appellants are allowed, except the appeal filed by Shri Ketan M. Shah is rejected.
Dictated & Pronounced in Court) (H.K. Thakur) (P.K. Das) Member (Technical) Member (Judicial) cbb 5