Custom, Excise & Service Tax Tribunal
Sbec Sugar Ltd vs C.C.E., Meerut on 30 January, 2013
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Block No.2, R.K.Puram, New Delhi COURT-I Date of hearing/decision: 30.1.2013 Central Excise Appeal No.136 of 2011 Arising out of the order in appeal No. 195 CE/MRT-I/2010-11 dated 30.8.2011 passed by the Commissioner (Appeals), Central Excise & Customs, Meerut I. For Approval and Signature: Honble Mr. S.S. Kang, Vice President 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? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes SBEC Sugar Ltd. .. Appellant Vs. C.C.E., Meerut . Respondent
Appearance:
Shri A.P. Gupta, Advocate for the appellants Shri S.K. Panda, A.R. for the respondent Coram: Honble Mr. S.S. Kang, Vice President Final Order No.55425/2013 Per Mr. S.S. Kang:
Heard both sides.
2. The appellants filed this appeal challenging the impugned order of Commissioner (Appeals) against imposition of penalty of 2,61,328/- under Rule 25(1)(a) & (b) of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944.
3. Brief facts of the case are that the appellants are engaged in the manufacture of sugar and are also availing credit in respect of capital goods as well as inputs. During the period from 30.11.04 to 31.3.2009 the appellants cleared certain quantity of scrap of capital goods without payment of duty. When the audit party pointed out the discrepancy the appellants paid duty and also interest on 20.11.2008. Thereafter, show cause notice was issued on 26.11.2009 for appropriation of the amount already deposited for imposition of penalty under Section 11AC of the Central Excise Act on the ground of suppression of fact with intent to evade payment of duty. The lower authority confirmed the demand and imposed penalty under Section 11AC of the Act.
4. Contention of the applicants is that penalty under Section 11AC is not sustainable as the applicants had not suppressed any material fact with intent to evade payment of duty. The applicants relied upon the statement of one Shri Rajiv Malhotra, Deputy General Manager (Finance) where he specifically stated that in respect of scrap of narrow pieces of items on which credit has been taken and are clearly identifiable , duty has been reversed. Rest of the scrap is not easily identifiable on which cenvat credit has been taken, the duty has not been paid. However, the same has been paid when the audit party has pointed out. The contention is that they are scrap of old and used bearing, old electric wire, old and used nickel etc. The contention is that prior to introduction of Rule 3(5)(a), there was no provision of duty on the transaction value on clearance of the scrap. This rule was introduced on 16.5.2005. In the present case, certain scrap was cleared prior to introduction of Rule. The contention is that when audit party pointed out the discrepancy for payment of duty in respect of scrap the same has been immediately paid with interest. Hence the allegation that mere willful misstatement or suppression of fact with intent to evade payment of duty is not sustainable by invoking extended period . The appellants are not contesting the duty demand , therefore, the ingredients of Section 11AC are fulfilled and the appellants are not liable to pay penalty under Section 11AC of the Central Excise Act, 1944.
5. Revenue also relied upon the decision of Honble Supreme Court in the case of C.C.E., Visakhapatnam vs. Mehta & Co. reported in 2011 (264) ELT 481 (SC) to submit that the 5 year period for invoking extended period will start from the date of knowledge by the Department. The Revenue came to know about their payment of duty when audit party raised objection. Therefore, the demand is rightly made by invoking extended period.
6. I find that demand of duty is confirmed which is not contested by the Revenue under the provisions of Section 11AC of the Act by invoking extended period. The appellants are also not contesting it. In these circumstances, I find merit in the contention of Revenue that ingredients of Section 11AC of the Act are not fulfilled. Therefore, I find no infirmity in the impugned order. The appeal is dismissed.
(S.S. Kang) Vice President scd/ 1