Custom, Excise & Service Tax Tribunal
M/S. Hoganas India Ltd vs Commissioner Of Customs, Pune on 12 August, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. II APPEAL NO. C/555/05 [Arising out of Orders-in- Original No. 05/Cus/2005 dated21-3-2005 passed by the Commissioner of Customs, Pune] For approval and signature: Honble Mr Ramesh Nair, Member(Judicial) Honble Mr. Raju, Member (Technical) =======================================================
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 : seen
of the Order?
4. Whether Order is to be circulated to the Departmental: Yes
authorities?
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M/s. Hoganas India Ltd
:
Appellant
VS
Commissioner of Customs, Pune
:
Respondent
Appearance
Shri. Prashant Patankar, Advocate for the Appellants
Shri. Chatru Singh, Asstt. Commissioner(A.R.) for the Respondent
CORAM:
Honble Mr. Ramesh Nair, Member (Judicial)
Honble Mr. Raju, Member (Technical)
Date of hearing: 12/8/2016
Date of decision 13/12/2016
ORDER NO.
Per : Ramesh Nair
The fact of the case is that appellant imported raw material Stainless Steel Powder. The dispute was raised on the valuation of the goods. Three show cause notices were issued. The appellant approached to the Settlement Commissioner, wherein out of three show cause notices, one was settled and two show cause notices related to present appeal case dated 7-9-2002 and 13-8-2002 were not settled as the amount involved was less than prescribed amount for the purpose of settlement of the case. The appellant have not disputed the duty amount and discharged the duty and adjudicating authority adjudicated both show cause notices and apart from confirmation of demand of duty, demand of interest, penalty and imposition of redemption fine were also confirmed. Being aggrieved by the impugned order, appellant filed appeal only for waiver of penalty, dropping of interest and redemption fine.
2. Shri. Prashant Patankar, Ld Counsel for the appellant submits that issue is only related to penalty, interest and redemption fine. He submits that demand is beyond the five years therefore the same is not in terms of Section 28 consequently penalty imposed under Section 114A is also not applicable as the same applies to determination of duty under Section 28. He alternatively submits that adjudicating authority has not given option to avail the benefit of 25% penalty as provided in the proviso to Section 28 AC. In this regard he relied upon following judgments:
(a) Commissioner of C. Ex. & Cus., Surat-I Vs. Santosh Textile Mills[2016(334) ELT 54(Guj)] upheld by the Honble Apex Court reported as [2016(334) ELT A46(SC)] He further submits that as regard the interest the adjudicating authority demanded interest @ 24% for the entire period whereas during the relevant period i..e. 9-10-1996 to 1-4-2004 the rate of interest were varying therefore uniform rate of @ 24% was wrongly applied by the adjudicating authority. As regard the redemption fine, he submits that the goods were neither available nor it was seized and not released provisionally, therefore redemption fine should not have been imposed.
3. Shri. Chatru Singh, Ld. Asstt. Commissioner(A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that there is no dispute that demand of duty which was confirmed invoking extended period therefore penalty of equal amount is inevitable. As regard the option of 25% penalty, he submits that jurisdictional Honble Bombay High Court in case of Commissioner of Central Excise, Raigad Vs. Castrol India Ltd [2012(286) ELT 194(Bom) held that if the adjudicating authority fails to refer in the order its availability, assessee cannot agitate that there is violation of Section 11AC. It was also held that option of 25% penalty cannot be permitted beyond time prescribed under Section 11AC. He also placed reliance on the following judgments:
(a) Commissioner of Customs, BLR Vs. Toyota Kirloskar Motors[2015(324) ELT 636(SC)
(b) Commissioner of C. Ex. Vs. CESTAT Chennai [2015( 321) ELT 86(Mad)]
(c) Agro Tech Foods Pvt Ltd. Vs. Commisisner [2015(330) ELT 448(Tri. Mum)]
(d) Commissioner of C. ex. JP Vs. Lucky Plast Ltd [2015( 323) ELT 40(Raj)]
(e) Commissioner of Customs & C. Ex. Coimbatore Vs. Premier Polytronics P Ltd [2015( 320) ELT 83(Mad)]
(f) Commissioner of Customs(Export() Vs. Bansal Industries [2007(207) ELT 346(Mad)]
(g) Gujarat Travancore Agency Vs. Commissioner of Income Tax[1989(42) ELT 350(SC)]
(h) Shree Bhagwati Steel Rolling Mils Vs. Commr. Central Ex[2015(326) ELT 209(SC)]
4. We have carefully considered the submissions made by both sides and perused the record.
5. We find that limited issue to be decided by us is penalty, interest and redemption fine. As regard the penalty the adjudicating authority rightly imposed equal amount of penalty as provided under 28AC of the Customs Act, 1962, which adjudicating authority has no discretion to reduce. As regard the option of 25% of penalty, we find that there are contrary judgments of the Honble High Courts on the issue. Moreover adjudicating authority has not considered the judgments cited by the rivals. Therefore it is in the interest of justice that Commissioner should consider the judgments thereafter decide whether appellants are entitle for option of 25% penalty. As regard the demand of interest, we find that interest is chargeable under Section 28AB. However as submitted by the Ld. Cousnel that the interest was chargeable at different rates in the different period in terms of notification issued from time to time as detailed below:
Sr no.
Notification No. & Date Effective date Rate P.A. From To 1 47/1996-Cus NT(09/10/1996) 09/10/1996 28/02/2000 20% 2 16/2000-Cus NT(01/03/2000) 01/03/2000 11/05/2000 24% 3 33/2000-Cus NT(12/05/2000) 12/5/2000 12/05/2000 24% 4 27/2002-Cus NT(13/05/2002) 13/05/2002 11/09/2003 15% 5 76/2003-Cus NT(12/9/2003 12/09/2003 31/03/2011 13% 6 18/2011-Cus NT(01/03/2011) 01/04/2011 18% In view of the above statutory rates of interest, we find that adjudicating authority has arbitrarily applied @24% interest rates without any authority. Therefore the same is not sustainable. We hold that adjudicating authority should re-quantify the interest as per the rates prevailing from time to time as shown in the above table. As regard the redemption fine, we find that since the goods were not available and same was neither seized nor released provisionally, the redemption fine was not warranted. This issue has been decided by this Tribunal larger bench in case of Shiv Kripa Ispat Ltd Vs. Commissioner [2009(235) ELT 623(Tri. LB)]. Following the said judgment, we drop the redemption fine. As per our above discussion on the issue of penalty and interest matter stands remanded to the original adjudicating authority. Appeals is disposed of in the above terms. (Order pronounced in court on______________ ) Raju Member (Technical) Ramesh Nair Member (Judicial) sk 3 C/555/05