Custom, Excise & Service Tax Tribunal
C.C.E., Delhi Iii, Gurgaon vs Jumps Auto Industries Pvt. Ltd on 19 May, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, SCO 147 148, Sector 17-C, Chandigarh-160 017 COURT-I Date of hearing/decision: 19.5.2016 Central Excise Appeal No. E/3767/2006 Arising out of the order in appeal No.277-78/NS/GGN/06 dated 29.9.2006 passed by the Commissioner, Central Excise (Appeals), Delhi III, Gurgaon. For approval and signature: Honble Mr. Ashok Jindal, Judicial Member Honble Mr. Raju, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?-* 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? C.C.E., Delhi III, Gurgaon .. Appellant Vs. Jumps auto Industries Pvt. Ltd. . Respondent
Appearance:
Present Shri G R Singh, A.R. for the Appellant/Revenue Present Ms. Swati Gupta, Advocate for the respondent Coram: Honble Mr. Ashok Jindal, Judicial Member Honble Mr. Raju, Technical Member Final Order No.: 60087/2016 Per Ashok Jindal:
Revenue is in appeal against the impugned order wherein penalties imposed on the respondent have been dropped by the ld. Commissioner (Appeals).
2. The facts of the case are that the respondents are engaged in the manufacture of auto electrical parts but not registered with the Department. When the departmental officers visited their factory on 19.12.2003 the statements were recorded and it was resulted that the respondent had manufactured and cleared the excisable goods to the tune of Rs.5,28,50,227/- without payment of duty and the goods were ultimately exported by M/s Jumps (India) Impex. In this background, a show cause notice was issued proposing demand of duty from the respondent and the same was adjudicated demanding duty. The adjudicating authority in its order observed that there was no intention to evade payment of duty therefore, restrained from imposing penalty under Section 11AC of the Act. But in the final order, penalty of Rs.10 lakhs was imposed under Rule 25 of the Central Excise Rules 2001 and Rule 26 of the Central Excise Rules 2001 on Shri Sanjay Malhotra, Managing Director of the party. Before Commissioner (Appeals), penalties on both the respondents have been dropped. Aggrieved from the said order, Revenue is in appeal before us.
3. Heard the ld. A.R. and perused the records. In the impugned order, the ld. Commissioner (Appeals) has observed that there was no intention to evade payment of duty on the part of the respondent. The same view has been taken by the adjudicating authority. Therefore, in the absence of any mala fide intention of the respondent, provisions of rule 25 of the Central Excise Rules, 2001 are not invokable. Consequently, no penalty is imposable on the respondent.
4. We have seen the said provisions and also examined the decision of the Honble High Court of Gujarat in the case of C.C.E. & Cus. Vs. Saurashtra Cement Ltd. 2010 (260) ELTA 71 (Guj.) wherein the Honble High Court has examined the issue and observed as under:
17.?It is also to be borne in mind that Rule 25 starts with the word Subject to the provisions of Section 11AC............. Section 11AC of the Central Excise Act deals with penalty for short levy or non-levy of duty in certain cases. It says that where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of Section 11AC, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking Section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short-levied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any willful misstatement or suppression of facts. If these ingredients are not present, penalty under Section 11AC cannot be levied. Since Rule 25 can be invoked subject to the provisions of Section 11AC of the Act, as a natural corollary, the ingredients mentioned in Section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules. The said order has been affirmed by the Honble Apex Court reported in 2013 (292) ELT A 98. As the issue is no longer res integra and as observed by the authorities below that there was no intention to evade payment of duty on the part of the respondent, the provisions of Rule25 of Central Excise Rules, 2001 are not invokable and as such the penalties are not imposable. In view of the above observations, we do not find any infirmity in the impugned order. The same is upheld. The appeal filed by Revenue is dismissed.
(Ashok Jindal) Judicial Member
(Raju)
Technical Member
scd/
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