Custom, Excise & Service Tax Tribunal
Hemnil Metal Processors Pvt. Ltd vs Commissioner Of Central Excise, Pune-I on 7 July, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO. E/356/09-Mum (Arising out of Order-in-Appeal No. PI/VSK/02/2009 dated 13/1/2009 passed by the Commissioner (Appeals) Central Excise, Pune-I 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?
=============================================================
Hemnil Metal Processors Pvt. Ltd.
:
Appellants
VS
Commissioner of Central Excise, Pune-I
Respondents
Appearance
Shri N. Narayanan, Advocate, for Appellants
Shri B.P. Pareira, JDR Authorized Representative
CORAM:
Shri Ashok Jindal, Member (Judicial)
Date of decision : 07/07/2010
ORDER NO.
Per : Ashok Jindal, Member (Judicial)
By this appeal the appellant is challenging imposition of penalty under Section 11AC of the Central Excise Act, 1944.
2. The relevant portion of the show cause notice which is reproduced are as under:-
The Preventive officers of Division had visited the factory of the assessee on 19/07/2005. On going through the records of the assessee, it was noticed that the assessee had availed credit on capital goods to the tune of Rs.2,84,486/- even after their finished products was not dutiable in view of Boards Circular No. 811/08/2005-CX dated 2/03/2005. Wherein, it was held that the process of cutting of HR/CR coils into sheets or slitting of sheets into streeps does not amount to manufacture. On being pointed out the assessee has paid the amount of Rs. 284486/- vide PLA entry No. 16 dated 25/07/2005 against the Cenvat Credit which was wrongly taken and utilized by them. They also inform the same vide their letter dated 25/07/05 to the Department. (Assessee letter is relied upon document copy enclosed.
NOW, THEREFORE, the assessee are hereby directed to show cause to the Assistant Commissioner of Central Excise, Pune V Division, having his office at Excise Bhavan, Near Akurdi Railway Station, Akurdi, Pune 44 as to why:-
(i) The Central Excise Duty totally amounting to Rs.2,84,486/- (Rupees Two lakhs eighty four thousands four hundred and eighty six only) should not be recovered under Rule 14 of Cenvat Credit Rules of 2004 read with the provisions of Section 11A of the Central Excise Act, 1944 and adjusted against the payment already made by them.
(ii) Penalty should not imposed upon them under the provisions of Rule 15(2) of Cenvat Credit Rules 2004, read with Section 11AC of the Central Excise Act, 1944.
(iii) Interest should not be demanded from them under the provisions of Section 11AB of the Central Excise Act, 1944.
The lower authority as confirmed the duty demand and penalty against the appellant. The appellant paid the duty before issuance of the show cause notice along with interest but is challenging the penalty confirmed under Section 11AC on the ground that in the show cause notice nowhere, it is alleged that the appellant has suppressed the facts, done the fraud or in collusion or have made any willful misstatement with an intention to evade payment of duty.
3. The learned Advocate appearing on behalf of the appellant submits that in the show cause notice does not set out any particular in respect of fraud or collusion or willful misstatement or suppression of facts or contravention with intention to evade payment of excise duty. No allegation is made out against the appellant but only pointed out that the assessee accepted from mistakes. Hence, without the ingredients of Section 11AC of the Central Excise Act, to penalize the appellant, no penalty can be leviable on the appellant. To support this contention he placed reliance in the case of Kaur & Singh Vs. Collector of Central Excise, New Delhi reported in 1997 (94) ELT 289 (SC) and Union of India Vs. Rajasthan Spinning & Weaving Mills reported in 2009 (2380 E.L.T. 3 (S.C.) wherein the Honble Apex court has held that in the absence of any allegation in the notice and there were no application of penalty provisions under Section 11AC of the Act.
4. On the other hand, the learned DR submitted that there is a contravention of the provisions of law and in todays scenario the assessee is best judge of his activity and the intention is to be drawn from the act of the assessee. In self removal procedure, the assessee has to follow the provisions of law and Act. Accordingly and in this case the appellant has admitted his mistake by not following the provisions of law. Hence, the penalty has rightly been levied on the appellant.
5. Heard both sides.
6. On careful examination of the show cause notice, I find that nowhere it is alleged against the appellant that the Act of the appellant was of suppression of facts, fraud, collusion, willful misstatement or in contravention of law with intent to evade payment of duty. Mere invoking the provisions of Section 11AC does not confer that the appellant is liable to pay penalty. To invoke the provisions of Section 11AC the allegations are to be framed out in the show cause notice showing the suppression or fraud or willful misstatement or collusion or contravention of law with an intent to evade payment of duty are to be set out. In the absence of same no penalty can be imposed. Accordingly, in this case, penalty under Section 11AC is not warranted, as not alleged in the show cause notice. Accordingly, impugned order is set aside qua penalty, appeal is allowed.
(Pronounced in court) (Ashok Jindal) Member (Judicial) Sm 4