Custom, Excise & Service Tax Tribunal
Appeal No vs Represented By on 15 July, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT AHMEDABAD COURT: II Appeal No Arising out of Passed by Appellant Represented by Respondent
Represented by Dt. of hearing i.
E/68/2004 OIA No.Commr(A)/550/ VDR-I/2003, dt.15.12.2003 CCE(A) VDR CCE Vadodara Shri Sameer Chitkara, SDR M/s Swati Chemical Indus. Ltd.
None 15.07.09 ii.
E/2922/2004 OIA No.Commr(A) 255 to 257/VDR I/2004, dt.04.08.04 CCE(A) VDR M/s Supreme Petroleum None CCE Vadodara Shri Sameer Chitkara, SDR 15.07.09 iii.
E/3894/2005 OIA No.186-187/2005(Ahd-I)(AA/A-IV), dt.31.08.05 CCE(A) AHD M/s Kadamwala Textiles Mills Pvt. Ltd.
Shri P.M. Dave, Adv.
CCE Ahmedabad Shri R.S. Srova, JDR 16.07.09 iv.
E/3997/2005 OIA No.333/2005(Ahd-I)(AA/A-IV), dt.05.10.05 CCE(A) AHD M/s Ruby Chemicals Industries None CCE Ahmedabad Shri J.S. Negi, SDR 16.07.09 v.
E/35/2006 OIA No.161 to 163/2006(Ahd-I), dt.31.07.06 CCE(A) AHD CCE Ahmedabad Shri Sameer Chitkara, SDR M/s Rose Labs Ltd.
Adj. request 17.07.09 vi.
E/158, 159/2006 OIA No.159-160/2006, dt.31.07.06 CCE(A) AHD CCE Ahmedabad Shri J.S. Negi, SDR M/s Rainbow Dyes & Intermediates, M/s Deepak Chemicals None 17.07.09 vii.
E/161/2006 OIA No.167 to 169/2006(Ahd-I), dt.31.07.06 CCE(A) AHD M/s R. Kumar Spuntex Pvt. Ltd.
None CCE Ahmedabad II Shri S.K. Mall, SDR 17.07.09 viii.
E/188, 2814/2006 OIA No.200/2006(Ahd-I), dt.31.08.06 OIA No.130 to 132/2006(Ahd-I), dt.13.07.06 CCE(A) AHD CCE Ahmedabad Shri Sameer Chitkara, SDR M/s Gohil Packaging Pvt. Ltd.
Shri Hardik Modh, Adv. 17.07.09 ix.
E/253/2006 OIA No.183 TO 185/2006(Ahd-I), dt.117.8.06 CCE(A) AHD CCE Ahmedabad Shri Sameer Chitkara, SDR M/s Jaff Dyechem Pvt. Ltd. None 17.07.09 x.
E/369, 2963/2006 OIA No.236/2006(Ahd-I), dt.28.09.05 CCE(A) AHD CCE Ahmedabad Shri S.K. Mall, SDR M/s Cony Engineering Shri P.M. Dave, Advocate 15.07.09 xi.
E/439/2006 OIA No.403-404/2005(Ahd-I)(AA/A-IV), dt.118.11.05. CCE(A) AHD M/s Dintex Dyechem Ltd None CCE Ahmedabad Shri S.K. Mall, SDR 17.07.09 xii.
E/369/2007 OIA No.07-08/2007(Ahd-I), dt.16.01.07 CCE(A) AHD CCE Ahmedabad Shri R.S. Srova, JDR M/s Prem Processors Shri P.M. Dave, Adv.
15.07.09 xiii.
E/756/2007 OIA No.123 to 125/2007(Ahd-I), dt.28.03.07 CCE(A) AHD CCE Ahmedabad Shri R.S. Srova, JDR M/s Gopi Synthetics Shri P.M. Dave, Adv 15.07.09 xiv.
E/1374/2006 OIA No.RS/46 to 48/SRT-II/2006, dt.31.01.06. CCE(A) AHD CCE Surat II Shri S.K. Mall, SDR M/s Miranda Tools None 17.07.09 xv.
E/959/2007 OIA No.194 & 195/2007(Ahd-I), dt.22.05.07 CCE(A) AHD M/s Premier Die Casting & Engg. Co. Ltd.
Ms. Avani Mehta, Adv.
CCE Ahmedabad.
Shri J.S. Negi, SDR 16.07.09 SN Appeal No Arising out of Passed by Appellant Represented by Respondent Represented by Dt. of hearing xvi.
E/2313/2007 OIA No.Commr(A)/159/VDR-I/2004, dt.25.06.04 CCE(A) VDR CCE Vadodara I Shri J.S. Negi, SDR M/s Milestone Organic Ltd.
Adj. request 15.07.09 xvii.
E/265-266/2008 OIA No.231/2007(Ahd-I), dt.14.06.07 CCE(A) AHD M/s Ambuja Synthetics Mills Ltd.
None CCE Ahmedabad Shri S.K. Mall, SDR 15.07.09 For approval and signature:
Honble Mrs. Archana Wadhwa, Member (Judicial)
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 Yes 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:
MRS. ARCHANA WADHWA, MEMBER (JUDICIAL) Date of Decision:
ORDER No. /WZB/AHD/2009
Per: Mrs. Archana Wadhwa:
All the appeals are being disposed off by a common order, as the issue involved in all of them is the quantum of penalty imposable under Section 11AC of CEA, 1944. All the appeals stand remanded by Honble High Court of Gujarat, with directions to decide the issue afresh in the light of the Honble High Court decision in case of UoI Vs. M/s Dharmendra Textile Processors 2008 (89) RLT 103 (SC-LB) = 2008 (231) ELT 3 (SC) and in terms of proviso to Section 11AC.
2. As the facts in each and every case are different, they are being narrated separately, in short, as under:
i) Appeal No.E/68/2004:
Being aggrieved with the order passed by Commissioner (Appeals), vide which he has set aside the penalty imposed under Section 11AC of the Act, by following the Larger Bench decision in case of M/s Machino Montell (I) Ltd. 2004 (62) RLT 709 (CESTAT-LB), Revenue filed the appeal for enhancement of the penalty before Tribunal. The said appeal filed by the Revenue was rejected by Tribunal.
ii) Appeal No.E/2922/2004:
Commissioner (Appeals), vide his impugned order confirmed the demands against the assessee, but set aside the penalty imposed under Section 11AC on the ground that the entire duty was deposited before issuance of show cause notice and by following Larger Bench decision of the Tribunal in case of M/s Machino Montell (I) Ltd. 2004 (62) RLT 709 (CESTAT-LB). The appeal filed by the Revenue for enhancement of penalty was rejected by Tribunal.
iii) Appeal No.E/3894/2005:
The lower authorities confirmed the duty of Rs.4,34,133/- on the findings of clandestine removal and imposed penalty of equal amount under Section 11AC of CEA, 1944. On an appeal against the above order, Tribunal upheld the duty confirmation, but reduced the penalty to Rs.1,08,533/-, after taking note of the fact that the duty was deposited before issuance of show cause notice and by following the decision of the Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi).
iv) Appeal No.E/3997/2005:
The lower authorities confirmed the demand of Rs.79,278/- along with confirmation of interest and penalty of equal amount. The said order was challenged before Tribunal, who upheld the duty confirmation, but reduced the penalty from Rs.79,278/- to Rs.50,000/-.
v) Appeal No.E/35/2006:
Duty of Rs.2,50,481/- was confirmed against the assessee along with penalty of equal amount by original adjudicating authority. The said penalty was reduced by Commissioner (Appeals) by taking note of the fact that the entire duty stand paid before issuance of show cause notice and accordingly reduced the same to Rs.1.5 lakhs. On an appeal filed by the Revenue, Tribunal upheld the order of the Commissioner (Appeals) and rejected the appeal filed by the Revenue.
vi) Appeal No.E/158, 159/2006:
The appeal was filed by the Revenue against order of Commissioner (Appeals), vide which while confirming the demands of duties against the assessees, the penalties were reduced to Rs.10,000/-. The said appeals filed by the Revenue were rejected by Tribunal after observing that further enhancement of penalty is not justified.
vii) Appeal No.E/161/2006:
Tribunal vide its order confirmed the duty of Rs.1,37,320/- against the appellant, but reduced the penalty to the extent of Rs.75,000/- on the ground that the said amount was deposited by the assessee immediately.
viii) Appeal No.E/188, 2814/2006:
The original adjudicating authority confirmed the demand of duty of Rs.8,92,325/- against the assessee and imposed penalty of Rs.5 lakhs. The said order was challenged before Commissioner (Appeals) by the assessee who reduced the penalty to Rs.1 lakh. Revenue filed an appeal against the above order of Commissioner (Appeals), before Tribunal which was rejected.
In a separate set of proceedings, the very same OIO passed by Jt. Commissioner was also challenged by Revenue before Commissioner (Appeals), for enhancement of penalty. The appeal filed by Revenue before Commissioner (Appeals) was rejected. The order of the Commissioner (Appeals) was challenged by Revenue before Tribunal, who rejected their appeal on the ground that the earlier order confirming penalty of Rs.1 lakh stand finalised inasmuch as the earlier appeal filed by the Revenue was rejected. Both the appeals now stand remanded to Tribunal for fresh decision in the light of Honble Supreme Court judgment.
ix) Appeal No.E/253/2006:
The duty confirmation is not in dispute in the present appeal. As Commissioner (Appeals) has reduced the penalty from Rs.1,38,377/- to Rs.50,000/- on the ground that the duty was deposited before issuance of show cause notice, Revenue filed the appeal before Tribunal. The said appeal of the Revenue was rejected by taking note of the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi) and by observing that as penalty amount of Rs.50,000/- was more than 25% of the duty amount, there is no reason to enhance the same.
x) Appeal No.E/369, 2963/2006:
Duty of Rs.5,19,848/- was confirmed against the assessee by original adjudicating authority along with penalty of Rs.2.5 lakhs under Section 11AC. The said order was challenged by assessee before Commissioner (Appeals), who upheld the duty demand, but set aside the imposition of penalty. Appeal No.E/2963/2006 was filed against the order of Revenue.
Original order passed by the Commissioner (Appeals) imposing penalty of Rs.2.5 lakhs was also challenged by Revenue before Commissioner (Appeals), who rejected the same on the ground that the penalty of Rs.2.5 lakhs imposed upon the assessee, stand set aside by him. He, accordingly, rejected the Revenues appeal. The said order of Commissioner (Appeals) was challenged by Department in Appeal No.E/369/2006.
Tribunal, allowed Revenues appeal No.E/2963/2006, by imposing penalty to the extent of 25% of duty amount and rejected the appeal No.E/369/2006.
xi) Appeal No.E/439/2006:
Duty of Rs.1,02,428/- confirmed by the lower authorities was not contested. Challenge was only to the penalty of identical amount imposed upon them. Tribunal, by taking note of the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi), reduced the penalty to 25% of the duty determined.
xii) Appeal No.E/369/2007:
Being aggrieved with the order passed by the Commissioner (Appeals), while confirming the duty of Rs.5,03,353/-, reduced the penalty to Rs.1 lakh by taking note of the fact that the entire duty stand paid by the assessee. Revenue challenged the said order before Tribunal for enhancement of penalty to the extent of 100% of duty amount. Tribunal, by taking note of the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi), reduced the penalty to 25% of the duty determined.
xiii) Appeal No.E/756/2007:
Commissioner (Appeals), while confirming the demand of duty on the allegations of clandestine removal, set aside the penalty imposed upon the assessee. On an appeal filed by the Revenue, penalty was enhanced to 25% of duty amount, in the light of the law declared by the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi).
xiv) Appeal No.E/1374/2006:
Being aggrieved with the order passed by Commissioner (Appeals), vide which he has reduced the penalty imposed under Section 11AC and under Section 114 A of Customs Act, 1962, while confirming the demand against the assessee, Revenue filed the appeal before Tribunal. The said appeal was rejected by the Tribunal, by upholding the reduction in quantum of penalty.
xv) Appeal No.E/959/2007:
Commissioner (Appeals), while confirming the demand of duty against the assessee, reduced the penalty to 25% of the duty demand on the ground that the duty was paid before issuance of show cause notice. The said order was challenged by Revenue before Tribunal and by following the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi) and in case of M/s K.P. Pouches (P) Ltd. Vs. UOI 2008 (85) RLT 483 (Del.), it was held that 25% of the duty imposed upon the company is justified. Revenues appeal was accordingly rejected.
xvi) Appeal No.E/2313/2007:
Commissioner (Appeals), while confirming the duty demand against the assessee, set aside the penalty imposed upon them on the ground that the entire duty stand deposited by them before issuance of show cause notice. On an appeal filed by the Revenue for enhancement of penalty, the same was rejected.
xvii) Appeal No.E/265-266/2008:
Duty confirmation against the assessee were upheld by Tribunal, but penalties were reduced to 25% of the duty amount in terms of the decision of Honble High Court of Delhi in case of CCE Vs. Malbro Appliances 2007 (79) RLT 109 (Delhi) and in case of M/s K.P. Pouches (P) Ltd. Vs. UOI 2008 (85) RLT 483 (Del.).
3. I find that the law stands declared by the Honble Supreme Court in the above referred judgment in the case of M/s. Dharmendra Textile Processors laying down that where the provisions of Section 11AC are invoked, authorities have no discretion to impose less penalty. In view of the above, penalty in all the appeals is increased to the 100% of the duties involved in each case.
4. However, at this stage I take note of the first and second Proviso to Section 11AC, which were not the subject matter of the Honble Supreme Courts judgment. In terms of the said Proviso, if duty and interest is paid within thirty days from the date of communication of the order, the amount of penalty liable to be paid shall be 25% of the duty so determined. Second Proviso is to the effect that the benefit of the first Proviso would be available provided the reduced penalty is also paid within the period of thirty days referred to in that Proviso. The 3 & 4 Proviso to Section 11AC are to the effect that if the penalty is enhanced by the appellate authority, the benefit of reduced penalty shall be available if the amount is deposited within a period of thirty days of the communication of the said order.
5. The said Provisos were the subject matter of consideration of their Lordships of Punjab & Haryana Court in the case of Commissioner of Central Excise, Rohtan Vs. JR Fabrics Pvt. Ltd. reported in 2009 (238) ELT 209 (P & H) . After taking note of the Honble Supreme Courts judgment in the case of Dharmendra Textile Processors, it was observed that when the Adjudicating Authority as also Commissioner (Appeals) acted illegally and contrary to the first Proviso to Section 11AC of the Act, and no option to pay the dues and penalty of 25% within 30 days was given to the assessee the fault lies with the authorities and not with the assessee. As such the Honble Delhi High Courts decision in the case of Malbro Appliances Pvt. Ltd. reported in 2007 (208) ELT 503 (Tri.-Del.) and KP Pouches Pvt. Ltd. judgment reported in 2008 (228) ELT 31 Delhi was concurred with.
6. In terms of above judgment of Honble High Court of Punjab & Haryana, the orders not giving such an option to the assessees are illegal and have to be set aside. If that be so, the matters need to be remanded for adjudging penal liabilities in terms of Apex Courts judgment in the case of Dharmendra Textiles, along with extending option in terms of 1st and 2nd Proviso to Section 11AC. In such a scenario, the period of 30 days to deposit the dues along with 25% of penalty shall start running from the date of passing fresh orders by the adjudicating authority. However, instead of adopting the above route, penalties can be enhanced at appellate level with option to deposit reduced penalties along with other dues within a period of thirty days from the date of passing appellate orders, in terms of 3rd and 4th Proviso to Section 11AC.
7. In view of the above discussion I enhance the penalty equal to the duty confirmed against the assessees. However, in view of the Provisos to Section 11AC and the Honble High Courts judgments referred supra, I give an option to the assessee to deposit the entire dues along with 25% interest of penalty within a period of thirty days of communication of the present order, in which case the penalty shall stand restricted to 25% of the duty amount. All the appeals are disposed off in above terms.
(Pronounced in Court on _________________________) (Archana Wadhwa) Member (Judicial) cbb Case No Assessee Respondent DOH DB/ SMB PER Dt/Time of Dict Dt.of putting draft Dt.of receipt of appd.
Draft Dt.of putting up fair order Pages Pronounced on/NA Reserved 17.07.09 14.00 ??
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