Custom, Excise & Service Tax Tribunal
Commissioner Of Customs Central Excise ... vs Rajkumar Saraf on 18 March, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
REGIONAL BENCH - COURT NO. I
Excise Appeal No. 87290 of 2013
(Arising out of Order-in-Original No. 05/Commissioner/Goa/Cx/2012-13
dated 30.11.2012 passed by the Commissioner of Customs and Central
Excise & Service Tax, Panaji-Goa)
Commissioner of Customs, Central Excise & .... Appellant
Service Tax, Goa
ICE House, EDC Complex,
Patto, Panaji, Goa- 403 001.
Versus
Rajkumar Saraf .... Respondent
Chairman and MD., M/s Zenith Computers Ltd., Plot No. 33 & 37, Sancoale Industrial Estate, P.O. Zuari Nagar, Goa- 403 001.
With Excise Appeal No. 87291 of 2013 (Arising out of Order-in-Original No. 05/Commissioner/Goa/Cx/2012-13 dated 30.11.2012 passed by the Commissioner of Customs and Central Excise & Service Tax, Panaji-Goa) Commissioner of Customs, Central Excise & .... Appellant Service Tax, Goa ICE House, EDC Complex, Patto, Panaji, Goa- 403 001.
Versus
Prasanna Kumar .... Respondent
Senior Manager (Commercial), M/s Zenith Computers Ltd., Plot No. 33 & 37, Sancoale Industrial Estate, P.O. Zuari Nagar, Goa- 403 001.
And Excise Appeal No. 87292 of 2013 (Arising out of Order-in-Original No. 05/Commissioner/Goa/Cx/2012-13 dated 30.11.2012 passed by the Commissioner of Customs and Central Excise & Service Tax, Panaji-Goa) Commissioner of Customs, Central Excise & .... Appellant Service Tax, Goa ICE House, EDC Complex, Patto, Panaji, Goa- 403 001.
Versus Shri P.R. Lakshmanan .... Respondent Ex-Senior Vice President, M/s Zenith Computers Ltd., Plot No. 33 & 37, Sancoale Industrial Estate, P.O. Zuari Nagar, Goa- 403 001.
2 E/87290, 87291 & 87292/2013 Appearance:
Shri Xavier P.M. Mascarenhas, Authorized Representative for the Revenue Shri Siddhanth Sriram, Advocate for the Appellants CORAM:
HON'BLE MR. S.K. MOHANTY, MEMBER (JUDICIAL) HON'BLE MR. M.M. PARTHIBAN, MEMBER (TECHNICAL) FINAL ORDER NO. A/85489-85491/2025 Date of Hearing: 18.03.2025 Date of Decision: 18.03.2025 Per: S.K. MOHANTY Heard both sides and perused the case records.
2. M/s. Zenith Computers Ltd., during the material time, were engaged in the manufacture of Computers, falling under Chapter Sub-heading 8471 4900 of the First Schedule to the Central Excise Tariff Act, 1985. The Directorate General of Central Excise Intelligence (DGCEI) received the intelligence that the said manufacturer had evaded Central Excise duty by way of non-
payment of the duty amount on the value of software preloaded on their Computers. On the basis of detailed investigation into the matter, the department had issued the Show Cause Notice (SCN) dated 07.10.2011, proposing for confirmation of the duty demand on the said manufacturer of M/s. Zenith Computers Ltd., and for imposition of penalties on the said firm along with personal penalties on their officials. The said SCN was adjudicated vide the impugned order dated 30.11.2012, wherein the learned Commissioner of Customs, Central Excise and Service Tax, Goa has confirmed duty demands on the manufacturer M/s. Zenith Computers Ltd., along with interest also imposed penalty on them. However, the proposals made in the SCN for imposition of personal penalties on the present appellants were dropped by the Adjudicating Authority, holding as under:
"50. As regards the question of personal penalties on Noticee Nos. 2,3 and 4 under rule 26 of Central Excise Rules, 2002, it must be admitted that the evidence regards personal involvement of these persons was not brought out clearly in the show cause notice. Nowhere,
3 E/87290, 87291 & 87292/2013 it was mentioned as regards their personal involvement in the alleged offence. They have explained their side of the version as to why they have not included the value of software. For several years, they have been following the same procedure. Therefore, it can be held that they were under the bonafide belief that whatever they were doing is legally correct. Further, in the case of Shri Saraf, Noticee No.2 and the Chairman and MD of the Company, his statement was not even recorded but charged under rule 26 which is clearly not warranted. There is plethora of case law as regards non- impossibility of personal penalty under the said rule without establishing mensrea. Under these circumstances, I do not hold that there is any case against them for personal penalty under Rule 26 of Central Excise Rules, 2002."
3. On perusal of the SCN dated 07.10.2011, we find that no specific allegations were levelled against the appellants, justifying imposition of penalty under Rule 26 of the Central Excise Rules, 2002. Since, on factual appreciation of the facts on the case, the learned Adjudicating Authority has dropped the proposals made in the SCN for imposition of penalty on the present appellants, we are of the view that the said order passed by the learned Adjudicating Authority cannot be interfered with at this juncture, inasmuch as no plausible evidence was submitted by the department in support of the charges of involvement of the present appellants in the activities, concerning willful mis-statement, fraud, suppression etc., in defrauding the government Revenue.
4. In view of above, the impugned order, to the extent it has dropped the proposals made in the SCN for imposition of penalty on the present appellants sustains and accordingly, the appeals filed by Revenue are dismissed.
(Dictated and pronounced in open court) (S.K. Mohanty) Member (Judicial) (M.M. Parthiban) Member (Technical) SM