Customs, Excise and Gold Tribunal - Calcutta
Commissioner Of Central Excise, New ... vs M/S. New Tobacco Co. Ltd. And M/S. ... on 12 January, 2001
Equivalent citations: 2001(74)ECC714, 2001(131)ELT159(TRI-KOLKATA)
ORDER
Mrs. ARCHANA WADHWA
1. Both the appeals are filed by the Revenue who is aggrieved with the impugned Order No.11/90 passed by the Commissioner of Central Excise, New Delhi, vide which he has confirmed the demand of duty of Rs.3,04,34,455.00 (Rupees three crore four lakh thirty-four thousand four hundred fifty-five) and with the impugned Order No.12/90 passed by the Commissioner of Central Excise, New Delhi, vide which he has confirmed the demand of duty of Rs.5,41,64,868.00 (Rupees five crore forty-one lakh sixty-four thousand eight hundred sixty-eight), against M/s. New Tobacco Company Ltd., Calcutta, but has not imposed any personal penalty on the said Company or on M/s. Duncans Agro Industries Ltd., who are the Holding Company of M/s. New Tobacco Co. Ltd. during the relevant periods. It is seen that the demands confirmed against M/s. New Tobacco Company Ltd. in terms of the said two impugned Orders dated 9.11.90, pertain to the periods - 1.7.81 to 31.3.82 for Appeal Nos.E-435 & 435A/92; and April, '82 to December, '83 for Appeal Nos.E-436 & 436A/92. The Commissioner in his impugned Order No.12/90 dated 9.11.90 had observed as under:-
"Notwithstanding the scheme of arrangement the penal provisions as distinguished from the demand of Central Excise duty could not be enforced against NTC, the transferee company, in so far as the contraventions prior to 1.4.84 are concerned."
It is seen that M/s. New Tobacco Company Ltd. were a wholly owned subsidiary of DALL for the period from 1.4.84 to 6.3.86. For the period from 1.4.84 to 8.3.85, they worked under a Cental Excise Licence in the name of DALL and it was only on 9.3.85 that a Central Excise Licence was granted to them in their name. From 6.3.86, they ceased to be subsidiary of DALL when the present management came into existence. No penalty has been imposed upon M/s. New Tobacco Company inasmuch as it was not in existence during the relevant period and they took over the tobacco division of DALL with all its assets and liabilities with effect from 1.4.84. Accordingly, the Commissioner had observed that for imposing penalty, mens rea is one of the factors, which was missing in the instant case because M/s. New Tobacco Company was not in picture during the relevant period. However, duty-liability has been fixed against M/s. New Tobacco Company on different considerations, which are not in challenge before us.
2. As regards non-imposition of personal penalty on M/s. Duncans Agro Industries Ltd., the Commissioner has observed that no show cause notice was issued to the said Company. As such, no action has been taken against the same.
3. The Revenue in their Memos of Appeals, apart from submitting that the respondents should have been penalised because of their deliberate misdeclaration, has not rebutted the above reasoning of the Commissioner. As regards DALL, it has been contended that since it was DALL who were manufacturing cigarettes under the na,e and style of M/s. NTC, who had been issued the show cause notice, penalty should have been imposed on M/s. DALL.
4. After hearing both sides, we do not feel convinced with the Revenue's contention. As admittedly no show cause notice was issued to M/s. DALL and the entire proceedings were against M/s. NTC. against whom demand of duty has also been confirmed, we are not impressed by the Revenue's contention that by lifting the corporate veil, DALL should should have been penalised, even in the absence of a notice proposing to do so. Similarly, the reasoning of the adjudicating authority that prior to 1.4.84, M/s. New Tobacco Company were not in the picture and as such, the question of mens rea and the resultant penal proceedings upon them, does not arise, impresses us. Accordingly, we do not find any merits in the Revenue's appeals and reject the same.