Custom, Excise & Service Tax Tribunal
Vvf Limited vs Commissioner Of Central Excise on 1 December, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/1138 and 1139 of 2009 Mum
(Arising out of Order-in-Appeal No. YDB/22&23/Bel/2009 dated 10.8.2009 passed by the Commissioner of Central Excise (Appeals), Mumbai II)
For approval and signature:
Honble Shri Ashok Jindal, 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 :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
VVF Limited
Nitin D. Rane
:
Appellant
Versus
Commissioner of Central Excise,
Belapur
Respondent
Appearance Shri A.V. Naik, Advocate for Appellant Shri Manish Mohan, SDR for Respondents CORAM:
Shri. Ashok Jindal, Member (Judicial) Date of Hearing : 01.12.10 Date of Decision : 01.12.10 ORDER NO.
The appellants are challenging the order of Commissioner (Appeals) imposing penalties under Rule 25 and Rule 26 of the Central Excise Rules, 2002 respectively.
2. The facts of the case are that the appellants firm is 100% EOU and sought clearance of their finished goods in DTA with effect from April 2005. Thereafter the appellants started clearing their goods in DTA following the procedure of Rule 8 of the Central Excise Rules, 2002 by paying duty by 5th of following month under which the duty is payable. They also filed returns regularly with the Department. The appellants cleared their goods under the duty paid invoice but the only allegation against them that they have not paid the duty at the time of clearance of their goods under Rule 17 of the Central Excise Rules, 2002. On 29.03.2006, their goods were detained which were cleared by them against the Central Excise duty paid invoice but duty of the same was not paid to the Revenue and the goods were confiscated and released under the provisional bond. Thereafter, a show-cause notice was issued to the appellants for confiscation of the said goods and imposition of penalty on the appellants. The adjudicating authority confirmed the confiscation and allowed the said goods to be redeemed on payment of fine and penalties( equivalent to duty) under Rule 25 of the Central Excise Rules, 2002 was imposed on the appellant and penalty under Rule 26 of Central Excise Rules, 2002 was imposed on the Dy. General Manager of the appellant. Aggrieved by the said imposition of penalties, the appellants are before this Tribunal.
3. The learned Advocate for the appellants submit that being a EOU, the appellants have got permission to clear their goods in DTA in April 2005 and have cleared their goods under Rule 8 ibid by paying duty by 5th day of the following month in which their goods were cleared. In fact they were not aware of the Rule 17 wherein the goods are to be cleared after paying duty. There was no intention of the appellants to clear the goods clandestinely and there was no charge-like in the show-cause notice. As the appellants are paying duty regularly on the monthly basis and have shown in the Returns also, the Revenue has not pointed out the mistake to them. Moreover, all the invoices against which the goods were cleared, the duty of central excise was shown as payable. In the absence of any mens rea, no penalty is leviable on the appellants. He further submits that in this case, no specific provision of Rule 25 has been prescribed in the show cause notice for imposing penalty on the appellants firm, hence no penalty can be levied on the appellant. To support the contention, he placed reliance on Amrit Foods vs. Commissioner of Central Excise, U.P 2005 (190) ELT 433 (S.C.) and J.K Corporation Ltd. vs. CCE Bhubaneswar 2007 (210) ELT 501 (Ori.). He further submitted that as per Section 11A, sub Section 2(B) of the Central Excise Act, 1944 they have paid the duty before the issuance of show cause notice, hence no penalty is imposable on the appellants.
4. On the other hand, the learned DR submitted that in the show cause notice, charges have been framed clearly against the appellants and no mentioning of the said clause under which the penalty is to be imposed is not relevant when the same is clear from the charges alleged against in the show cause notice. Moreover, the Judgement relied on by the learned Advocate are not on the identical facts as in this case the adjudicating authority has clearly held that the appellant is liable for penalty under Rule 25(1)(a) of the Central Excise Rules, 2002 which is not in the case of judgement relied upon by the learned Advocate. Further he submitted that the conduct of the appellants says that they are having malafide intention of not paying duty in time, hence the provision of Rules 25 and 26 ibid are attractable to this case.
5. Heard and considered.
6. The facts that the appellants are 100% EOU and sought permission to clear their goods in DTA with effect from April 2005 are not in dispute. It is also not in dispute that the appellants are paying duty on monthly basis as per Rule 8 and filing their Returns regularly. It is also not in dispute that the appellants are not issuing duty paid invoices and the same has been shown in the monthly returns as Duty payable. The only allegation against the appellants is that they are not paying duty at the time of clearance as per Rule 17 of the Central Excise Rules, 2002. When it is not alleged that there is any intention of the appellants to evade payment of duty, in that event, the allegation of mens rea cannot be alleged against the appellants. In that event and in the absence of any mens rea, penalty under Rule 25 is not imposable on the appellants as held by the Honble High Court of Punjab and Haryana in the case of Commissioner of Central Excise, Chandigarh vs. Sadashiv Ispat Ltd. 2010 (256) ELT 349 (P&H). The case law, cited by the learned Advocate are not relevant in the event of above findings. In view of the above findings, I do not find that the goods are liable for confiscation. Hence, penalty under Rule 26 of the Central Excise Rules, 2002 is also not leviable on the appellant. With these observations, I set aside the impugned order and allow the appeal with consequential relief, if any.
(Dictated in Court) (Ashok Jindal) Member (Judicial) nsk 5