Customs, Excise and Gold Tribunal - Delhi
Escorts Employees Ancillaries Ltd. vs Cce on 13 December, 2000
Equivalent citations: 2001(95)ECR336(TRI.-DELHI)
ORDER V.K. Agrawal, Member (T)
1. Shri R.C. Gupta, Ld. Advocate, submitted that M/s. Escorts Employees Ancillaries Ltd. were sending the inputs, on which Modvat Credit had been availed of, under Rule 57F(2) of the Central Excise Rules; that the Assistant Commissioner imposed a penalty of Rs. 6000/- on them as the inputs worth Rs. 26,100/- were not received back after further processing from the job workers and inputs valued at Rs. 2,96,230/- were received back after the stipulated period of 60 days; that Commissioner (Appeals) under the impugned Order had reduced the penalty to Rs. 3000/-. The Ld. Advocate, further, mentioned that the duty involved on the inputs not received back was only Rs. 6,525/- which has been deposited by them suo motu on 14.11.1994 even before the issue of the show-cause notice; that Rule 57F(2) did not specify any time limit for bringing back the inputs; that in any case the inputs were received back and used in the manufacture of the final products and as such no Revenue loss is involved in respect of inputs which were received after expiry of 60 days period. He relied upon the decision in the case of Jay Engineering Works Ltd. v. CCE wherein it was held that penalty proceeding are quasi criminal proceeding and no penalty is leviable under Rule 173Q of the Central Excise unless the mens-rea is established. The Ld. Advocate emphasised that there was no mens-rea in the present matter as the duty has been deposited by them in respect of inputs not received back and in other cases the inputs were received back though after the expiry of 60 days.
2. Shri S.C. Pushkaran, Ld. JDR, opposed the arguments by submitting that no mens rea is required for imposition of penalty under Rule 173Q; that as the inputs in respect of which Modvat Credit has been availed of, has not been utilised in or in relation to the manufacture of the Final Product, a penalty is imposable under Rule 173Q: that the Appellants have paid the duty after 7 months of the detection of non-receipt and delayed receipt of the inputs; that it is immaterial that no time limit was specified in Rule 57F(2) as the Commissioner in exercise of the powers conferred under Rule 233 of the Central Excise Rules has specified the time limit for return of the inputs. He also mentioned that it is settled law that penalty is a civil obligation and not criminal in nature.
3. I have considered the submissions of both the sides. It is not in dispute that inputs valued at Rs. 26,100/- involving duty 6,555/- was not received back by the Appellants. In view of this the Appellants are liable to penalty under Rule 173Q(l)(bb) of Central Excise Rules as the inputs have not been used in the manufacture of final products. The penalty is also imposable as the inputs were received back from the job workers after the expiry of 2 months in a number of cases and apparently the appellants had not sought any extension for receiving back the inputs. The Supreme Court in the case of Gujarat Travancore Agency v. Commissioner of Income Tax held that "A penalty imposed for a tax delinquency is a civil obligation, remedial and coercive in its nature, and is far different from the penalty for a crime or a fine or forfeiture provided as punishment for the violation of criminal or penal laws." However, taking into consideration the fact of depositing the amount and use of inputs which were received back in the manufacturer of final products, I reduce the amount of penalty from Rs. 3000/- to Rs. 1000/-. The appeal is disposed of in above terms.