Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S Latex Chemicals Pvt. Ltd on 4 February, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
COURT NO. II
Excise Appeal No. 821 of 2008-SM
(Arising out of Order-in-Appeal No. 25-CE/APPL/KNP/2008 dated 29.1.2008 passed by the Commissioner (Appeals), Customs & Central Excise, Kanpur)
CCE, Kanpur Appellant
Vs.
M/s Latex Chemicals Pvt. Ltd. Respondent
Date of Hearing: 4.2.2010 Appearance :
Appeared for Appellant - Shri S.N. Srivastava, SDR
Appeared for Respondent - Shri Hemant Bajaj, Advocate
CORAM: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER
Order No.dated.
Per D.N. Panda:
Against waiver of penalty made by both the authorities Revenue came in appeal. Revenues contention is that once there is stock discrepancy found and particularly shortage of raw material resulting in duty loss of Rs.1,27,224/-, the case was covered by Section 11A of the Central Excise Act, 1944 (hereinafter referred to as The Act). Once it is so covered, Section 11AC shall apply. Therefore Shri Srivastava, ld. DR appearing for Revenue submits that both the authorities below committed error for not imposing penalty.
2. Ld. Counsel Shri Hemant Bajaj appearing on behalf of the Respondent submits that concurrent finding of both the authorities suggests that the case was not being made as a case causing prejudice to the interest of Revenue in absence of the element of Section 11A being found out. Malafide of the assessee has not been brought to record. Merely because the assessee cooperated with Revenue to discharge the duty liability to reduce the litigation, penalty cannot proposed to be levied. Neither the show-cause notice nor the adjudication has made a finding to bring a case of any fraud, collusion, mis-statement or suppression of the fact. The authorities below have found that there was no corroborative evidence to establish that the goods were clandestinely removed. In absence of malafide, provision of Section 11A(2B) shall apply when the appellant has discharged the duty liability on ascertainment of such liability at the instance of Revenue. In such circumstance, even show-cause notice should not have been issued because duty demand has been discharged before issuance of show-cause notice. Shri Bajaj also submits that discharge of duty liability was informed to the investigating authorities.
3. Heard both sides and perused the record.
4. Ld. Adjudicating Authority has made a finding that there was no evidence to show that the goods were clandestinely removed. Such a finding was agreed by ld. Appellate authority below. In this respect, ld. Counsels argument has force to the extent of applicability of Section 11A (2B) of Central Excise Act 1944. The case that has been adjudicated by the authorities below indicates that there was cooperation by the assessee to discharge duty liability upon ascertainment by Revenue. While such was the fact, the authorities have not brought out whether the case still falls under proviso to Section 11A(1) of the Central Excise Act 1944. It appears that the authorities were satisfied that the assessee may only be covered by Section 11A(1) of the Central Excise Act 1944 without being covered by its proviso to get immunity under Section 11A (2B) of the Act for no penalty. In absence of ingredients of proviso to Section 11A of the Act and the notice issued does not establish the case to fall under that part of the law, it appears that the assessee was not exposed to penalty by both authorities below. Therefore the case may not be ruled out to attract Section 11A (2B) of the Act. When none of the authorities found that the shortage was relatable to malafide intention of the assessee to attract any element of the proviso to Section 11A(1) of the Act, in absence of such a finding, the order passed by the authorities below waiving the penalty does not require any disturbance. Accordingly, Revenues appeal is dismissed.
(Dictated & pronounced in open Court) (D.N. PANDA) JUDICIAL MEMBER RM