Custom, Excise & Service Tax Tribunal
Mr. Mukesh Kumar Gupta vs C.C.E., Delhi-Ii on 25 February, 2016
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI 110 066
Date of Hearing 25.02.2016
For Approval & Signature :
Honble Mr. R.K. Singh, Member (Technical)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
Yes
3.
Whether Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Appeal No. E/57737/2013-EX[SM]
[Arising out of Order-in-Appeal No.66/CE/LAPPL/D-II/2013, dated 02.04.2013 passed by the C.C.E.(Appeals), Delhi-II]
Mr. Mukesh Kumar Gupta Appellant
Vs.
C.C.E., Delhi-II Respondent
Appearance Mr. Sanjay Kumar, Advocate - for the appellant Mr. G.R. Singh, DR - for the respondent CORAM: Honble Mr. R.K. Singh, Member (Technical) Final Order No.50993/2016, dated 25.02.2016 Per Mr. R.K. Singh :
Heard.
2. The appellant is a manufacturer of copper rods/coils. During the visit to his factory, it was noticed by Central Excise officers that it did not maintain any records and was receiving materials on kachcha parchis cleared its goods without payment of duty clandestinely and did not maintain proper accounts. During visit of the factory, the Central Excise officers also found unaccounted goods namely, 540 kgs. of copper wires, 2,523.550 kgs. of copper rods (aggregately valued at Rs.12,54,420/-) were seized. The primary adjudicating authority inter alia ordered confiscation of such seized goods with an option to redeem them on fine of Rs.3 lakhs. It also imposed penalty of Rs.1.5 lakhs on the appellant. The Commissioner (Appeals) upheld the order of the primary adjudicating authority.
2. The appellant has contended that (i) it was operating within the Small Scale Industries (SSI) exemption limit and therefore was not required to maintain any records as per Central Excise law and in these circumstances, confiscation and penalty cannot be sustained. Several judgements were cited by the appellant in its support.
3. Ld. Departmental Representative on the other hand stated that the appellant was manufacturing excisable goods and therefore was required to maintain proper records, otherwise it would be impossible to ascertain when the SSI exemption limit was crossed and therefore the impugned order is sustainable.
4. I have considered the contentions of both sides. I find that the Commissioner (Appeals) in para 5 inter alia observed that I know that the status of the appellant is a small scale unit is doubtful for the fact that when the quantum of transactions is not recorded in the books of account and the entire transactions are carried out on loose slips, which obviously are destroyed once the transaction is complete. It is thus evident that the Commissioner (Appeals) had not come to a finding that the appellant was not entitled to SSI exemption; he only considered the appellants eligibility to SSI exemption doubtful. No confiscation and penalty can be ordered on the basis of mere doubt. I have also perused the Show Cause Notice, and find that in the entire Show Cause Notice no allegation is made that the appellant had exceeded the SSI exemption limit prescribed under Notification No.08/2003-CE. The discussion and finding portion of the primary adjudication order is also worth quoting here to demonstrate its worthlessness.
I have carefully gone through the facts of the case records as well as the submission made by the parties/Noticee in their defence and records of personal hearing held on 10.10.2012 and 15.10.2012 and in their written replies. Briefly stated, facts of the case are that party was engaged in the manufacturing of wire drawing of copper in different sizes from Copper Rod. During the visit of Central Excise staff of Anti-evasion branch the goods i.e., copper wire weighing 540 kgs. (@Rs.450/- per kg.) valued at Rs.2,43,000/- Copper Rods weighing 2523.550 kgs (@ Rs.400/- per kg) valued at Rs.10,09,420/- lying in the factory totally valued at Rs.12,52,420/- were detained vide Detention memo dated 04.03.2011 and later on converted into seizure dated 29.08.2011. During the visit of Central Excise staff of Anti-evasion branch one Tempo i.e. Tata 407 bearing Registration No.DL-1L-D5371 was found unloading the Copper Rods. Since the truck was found in clandestine removal of the excisable goods the same was detained vide detention memo dated 04.03.2011. Sh. Mukesh Kumar Gupta has not appeared for personal hearing in spite of various opportunities given to him. He has been submitting his written replies/letters just to delay the process of adjudication only. It may be seen that the discussion and findings in the primary adjudication order has no discussion and no finding. In these circumstances to allege that the appellant was indulging in duty evasion is clearly unsustainable. It has in effect been held by the High Court of Punjab and Haryana in the case of CCE, Jalandhar Vs. Shanti Fastners [2008 (226) ELT 340 (P&H)] that when exemption limit is not crossed, evasion of duty cannot be alleged even though goods were cleared without any covering documents and therefore confiscation and penalty cannot be ordered. CESTAT in its judgement in the case of Kinanotics India Vs. CCE, Kanpur [2007 (212) ELT 464 (Tri.-Del.)] has held as under:-
5.?In this case, there is no demand made from the appellant. In the show cause notice, the only allegation is that the appellants are not maintaining proper record of their production and, therefore, they are liable for penal action under Rule 173Q and Rule 209 of Central Excise Rules. It is not disputed by the Revenue that the appellants were working under small-scale exemption notification and it is not the case of the Revenue that by adding the value of the unaccounted goods, the appellant cross the value of clearance prescribed under the small-scale exemption notification. The appellant also relied upon the decision in the case of Dayal Industries v. CCE reported in 2006 (199) E.L.T. 237. The Tribunal in this case held that for small scale exemption, records or production and clearance not required to be maintained, therefore, is not liable for penalty. In view of the fact that in the present case, it is not the case of the Revenue the appellant cross the limit provided under the notification and no demand has been made. Therefore, in view of the above decision, the imposition of penalty and redemption fine is set aside, the appeal is allowed. The ratio of the above CESTAT judgement is squarely applicable to the present case.
5. In the light of the aforesaid analysis and judicial precedents, I do not find the impugned order sustainable and therefore the same is set aside. The appeal is allowed.
(R.K. Singh) Member (Technical) SSK -2-