Custom, Excise & Service Tax Tribunal
Commissioner Of Central Excise, ... vs Herbal Remedies India Ltd on 9 November, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. E/587/08 (Arising out of Order-in-Appeal No. RKR(157)52/08 dated 31.3.08passed by Commissioner of Central Excise & Customs (Appeals), Aurangabad.) For approval and signature: Honble Mr.P.G. Chacko Member (Judicial) ======================================================
1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Seen of the Order?
4. Whether Order is to be circulated to the Departmental : Yes authorities?
====================================================== Commissioner of Central Excise, Aurangabad Appellant Vs Herbal Remedies India Ltd Respondent Appearance:
Shri S.S. Katiyar, SDR, for Appellant None for Respondent CORAM:
Honble Mr.P.G. Chacko Member (Judicial) Date of Hearing: 09.11.2009 Date of Decision: 09.11.2009 O R D E R NO..
1. This appeal filed by the Revenue is for enhancement of the quantum of penalty Section 11AC of the Central Excise Act. There is no representation for the respondent despite notice, nor any request for adjournment. I have examined the records and heard the learned SDR.
2. In a show-cause notice dated 1.2.07, the department demanded differential duty of Rs 1,54,783/- (including education cess) for the period from 25.4.2005 to 31.12.2005 from the respondent by invoking the proviso to Section 11A (1) of the Act on the ground of undervaluation of the goods with intent to evade payment of duty. That notice also proposed to recover interest on duty under Section 11AB of the Act, as also to impose penalty on the assessee under Section 11AC of the Act. These proposals were contested. In adjudication of the dispute, the original authority confirmed the above demand of duty against the assessee and appropriated an earlier payment of theirs towards such demand. It also imposed equal amount of penalty on the assessee under Section 11AC of the Act. In an appeal filed by the assessee, the Commissioner (Appeals) reduced the quantum of penalty to Rs 65,000/-, while sustaining the rest of the order of adjudication. In the present appeal, the department submits that the amount of penalty equal to duty, imposed by the original authority, is not liable to be reduced under Section 11AC of the Act, inasmuch as such penalty is mandatory once the ground therefor is established. In this connection, the appellant has relied on a plethora of decision in support of this appeal. The learned SDR submits that the issue is no longer res integra inasmuch as the mandatory character of Section 11AC penalty has been underlined in Union of India vs Dharmendra Textile Processors 2008 (231) ELT 3 (SC). The learned SDR has also claimed support from the decision of the Supreme Court in Union of India vs Rajasthan Spinning & Weaving Mills 2009 (238) ELT 3 (SC).
3. In the case of Dharmendra Textile Processors (supra), it was held that Section 11AC left no discretion for imposition of a penalty lesser than what was prescribed thereunder. In the case of Rajasthan Spinning and Weaving Mills (supra), the Honble Supreme Court held that the payment of any duty before or after issuance of show-cause notice did not alter the penal liability under Section 11AC. In the present case, the assessee did not include the physicians samples in the assessable value of the medicaments which were cleared during the period of dispute despite the fact that there was a circular of the Board governing this aspect. The show-cause notice alleged that such undervaluation of goods was made with intent to evade payment of duty and accordingly, the extended period of limitation was invoked to recover the duty short-paid. This action of the department stands apccepted and there is no appeal of the assessee against the demand of differential duty. By their conduct, the assessee has acknowledged the existence of valid ground for invoking Section 11AC in this case. This is clear from the fact that they have not chosen to file appeal against the penalty of Rs 65,000/- maintained on them under Section 11AC. As per the apex courts ruling in Dharmendra Textile Processors case. as clarified in Rajasthan Spinning and Weaving Mills case (supra), there is no scope for reducing the quantum of penalty (equal to duty) imposed on the respondent by the original authority. Accordingly, the impugned order is set aside to the extent the same is adverse to the appellant. This appeal is allowed, with the result that the penalty on the respondent under Section 11AC shall be equal to the amount of duty short paid.
(Dictated in Court.) (P.G. Chacko) Member (Judicial) rk 3