Gujarat High Court
Commissioner vs M/S on 6 April, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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TAXAP/1194/2010 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1194 of 2010
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COMMISSIONER,
CENTRAL EXCISE & CUSTOMS, SURAT - I - Appellant(s)
Versus
M/S
ASHOK TRADING CO. (100% EOU) - Opponent(s)
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Appearance
:
MR
GAURANG H BHATT
for
Appellant(s) : 1,
None for Opponent(s) :
1,
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 24th March 2011
ORAL
ORDER (Per
: HONOURABLE Ms. JUSTICE SONIA GOKANI) Revenue, in the present Appeal, has proposed following question of law for our consideration :-
[A] Whether in the facts and circumstances of the case, the ld. CESTA Tribunal is justified in the eye of law in granting the option to the assessee to deposit the entire dues, interest alongwith 25% of penalty, within the period of thirty days of the communication of its Order dated 30.11.2009, in which case the Penalty shall stand restricted to 25% of the duty amount, in view of the proviso to Section 11 AC of the Central Excise Act, 1944 and relying upon the judgment of this Hon'ble High Court, in the matter of CCE, Ahmedabad v. M/s. Akash Fashion Prints Private Limited [2009 (93) RLT 471 (Guj.)], as well as, against the Ld. Tribunal's decision dated 21.07.2009 in the matter of CCE v. M/s. Swati Chemicals Industries & Ors. [which is under challenge in Tax Appeal No. 4677 of 2009, and pending before this Hon'ble High Court] ?"
[B]"Whether in the facts and circumstances of the case, the ld. CESTA Tribunal is justified in the eye of law in observing that when the Adjudicating Authority as also the Commissioner [Appeals] have acted illegally and contrary to the first proviso to the said Section 11AC of the said Act, and no option to pay the penalty of 25% within 30 days was given to the assessee, the fault lies with the Authorities, and not with the assessee ?"
[C] "Whether the assessee is entitled in the year 2009 to have the benefit of the proviso to Section 11AC of the said Act, which was very much available and open to the said assessee in the year 2004, though the Order-in-Original dated 30.11.2004 has been confirmed and upheld by the order-in-Appeal dated 18.04.2005, and later on also by the impugned order dated 30.11.2009 ?"
[D] Whether there is any bounden duty under the Central Excise Law cast upon the Adjudicating Authority to explain and/or to state with/ without the note, the provisions of 1st and 2nd proviso to Section 11 AC of the said Act, or to offer any specific option to any assessee or to advise thereof to the assessee so as to avail the same by such assessee, in the Order in Original itself or through any other legitimate manner ?"
[E] "Whether in the facts and circumstances of the case, the impugned order dated 30.11.2009 based upon the decision of this Hon'ble High Court, in the manner of CCE, Ahmedabad v. Akash Fashion Prints Private Limited [2009 (93) RLT 471 (Guj.)], as well as against the ld. Tribunal's decision dated 21.07.2009 in the matter of CCE v. M/s. Swati Chemicals Industries & Ors., is in accordance with all the four provisos to Section 11AC of the Central Excise Act, 1944 [Tax Appeal No 4677 of 2009 preferred by the Revenue before this Hon'ble High Court, and it is very much pending] ?"
Assessee-M/s.
Ashok Trading Company's factory premises was visited by a team of Officers of the Central Excise Department for preventive checks. They were found to have paid less duty, as the actual shortage of raw materials was found by the Department, and therefore, duty was found to be leviable alongwith interest to the tune of Rs. 9,97,274/=. A show cause notice to that effect was issued on 25th April 2004 and after taking into account the defense raised by the assessee, the order-in-original confirmed the duty demand on account of illicit clearance of goods and thereby contravened the provisions of the Central Excise Act, 1944.
Being aggrieved by the said order, this was challenged by the assessee by way of two appeals [one by the Unit and another by the Parter] before the Commissioner [Appeals], who rejected the appeal of the assessee and upheld the order-in-original. Both - the Unit and the partner-assessee challenged, by way of two separate appeals, the orders of the Commissioner [Appeals] before the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [hereinafter referred to as, "the CESTAT"]. The CESTAT rejected the appeal of the Unit ie., Messrs. Ashok Trading Company and confirmed & upheld the order-in-original giving an option to the Unit assessee to deposit 25% of the penalty determined within 30 days of the communication of its Order, failing which, to pay full amount of penalty already confirmed. It of course allowed the appeal of the partner on the ground that both the partner and the partnership firm cannot be saddled with penalty. The impugned order of the CESTAT is under challenged before this Court, placing the aforesaid question of law for our consideration.
What emerges from the order of the CESTAT is that the appeals preferred against the order of confirmation of duty, interest and penalty dated 4th May 2007, when was challenged before the Gujarat High Court, following the decision of Apex Court in the case of Union of India v. Dharmendra Textile Processors, reported in 2008 (231) ELT p-3, and the one, rendered in the case of Union of India v. Rajasthan Spinning & Weaving Mills & Anr., reported in 2009 (92) RLT 691 (SC), wherein mandatory penalty under Section 11AC of the Act was to be imposed, the High Court had remanded the case for decision on the limited question of imposition of penalty and pursuant to the said remand, the Tribunal ordered thus, "...On careful hearing of the submissions made by both the parties, I hold that the appellant firm is liable to pay the penalty equivalent to the duty confirmed. Accordingly, penalty amounting to Rs. 9,97,274/= is confirmed on the appellant firm. But, the penalty on the partner is waived as penalties on firm as well as parter (Both) cannot be imposed. Accordingly, the appeal filed by the partner is allowed. Further, the appellant-firm is given an option as per proviso to Section 11AC to deposit 25% of the penalty determined within 30 days of the communication of this order, failing which the appellant firm is liable to pay full amount of penalty confirmed."
Division Bench of this Court in the case of Commissioner of Customs & Excise, Ahmedabad-I v. Akash Fashion Prints Private Limited, reported in 2009 (239) E.L.T 439 (Guj) has held that, "...Section 11AC of the Act provides for levy of penalty in case of short levy or non-levy of duty in certain cases. The first proviso thereunder provides for exception to the main provision by stipulating that where the duty and the interest are paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid under Section 11AC of the Act shall be 25% of the duty so determined; and under second proviso, it is provided that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within a period of thirty days referred to in the first proviso."
This Bench also, in Tax Appeal No. 830 of 2010, considering the decision in the case of Akash Fashion Prints Private Limited [Supra], has dismissed the Appeal. Since there is no reason to interfere with the order passed by the Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad dated 30th November 2009, which is in consonance with the ratio laid down by this Court, we see no merits in the present Appeal. Accordingly, Appeal fails and is dismissed. No costs.
{Akil Kureshi, J.} {Ms. Sonia Gokani, J.} Prakash* Top