Customs, Excise and Gold Tribunal - Mumbai
Ashish Enterprises And Shri H.A. Oza vs The Commissioner Of Central Excise on 8 March, 2004
Equivalent citations: 2005(179)ELT545(TRI-MUMBAI)
ORDER K.D. Mankar, Member (T)
1. The instant two appeals are directed against the order-in-appeal passed by the Commissioner (Appeals), whereunder the appellants appeals against the order-in-original was rejected. In the order-in-original, the Additional Commissioner had imposed a penalty of Rs. 2 lakhs on M/s. Ashish Enterprises under Rule 173Q for fraudulently passing on the wrong modvat credit and a penalty of Rs. 50,000/- was imposed on Shri Ozha under Rule 209A/210 of Central Excise Rules, 1944.
2. The allegations against the appellant is that, they are "first stage a registered dealer" holding a Central Excise registration under the provisions of Rule 57GG of the Central Excise Rules, 1944. It is noticed that, the appellants had maintained two sets of invoice books for issuing modvatable invoices, without obtaining the permission of the Commissioner in writing. They did not submit within the stipulated time the duplicate copy of the invoice issued under Rule 57GG to the Superintendent of the Central Excise with whom they were registered. It was alleged that, consequent to these irregularities modvat credit of Rs. 3,98,084 and Rs. 6,540/- was fraudulently passed on. The appellants made the payment voluntarily when this was pointed out, before issue of show cause notice.
3. The facts enumerated above are not in dispute. It has been pleaded by the appellants that, they had not passed on irregular credit to the respective buyers, the department has already made the verification of the claim of modvat taken by the respective buyers with reference to the invoices issued by the appellant and it has been established that the concerned range superintendent has on verifiction confirmed that the modvat credit on the corresponding invoices has been correctly taken with reference to the duty payment on the material by the original manufacturer.
4. Heard both sides.
5. On examining the facts on record, I note that the appellants had admittedly used two sets of invoice books, containing the same serial numbers. The two invoice books were simultaneously used by the appellants for issue of modvatable invoices to various customers. Consequently, the invoices bearing the same numbers of different date came to be issued to different customers for different amounts of duty payment. Notwithstanding this, the verification carried out by the departmental authorities revealed that the duty payment reflected on the invoice was proper. Therefore, the use of two sets of invoice books is the only contravention of conditions prescribed under Rule 57GG (6) (ii) and 57GG(12).
6. In this connection, I note that apparently, on account of such breach of the Rule, there was a potential revenue loss, though it did not happen in this case. Nevertheless, for this act of violation, the appellants were correctly held liable to penalty.
7. The appellants are pleading that, simultaneous imposition of penalty on a proprietorship company and the proprietor is not sustainable. I find that this plea has a considerable merit and therefore I hold that separate penalty on the proprietor is not warranted when penalty has been imposed on the company. Therefore, the penalty imposed on Shri H.A. Oza is set aside.
8. So far as the penalty imposed on M/s. Ashish Enterprises is concerned, in the facts and the circumstances of the case, I feel that the ends of justice will be met if the penalty is confined to Rs. 50,000/-. Accordingly, I reduce the penalty from Rs. 2 lakhs to Rs. 50,000/- on the company.
9. The appeals are allowed partly in above terms.
(Operative part pronounced in Court)