Custom, Excise & Service Tax Tribunal
Cce, Jalandhar vs M/S Mohindra Enterprises on 10 August, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
COURT NO. II
Excise Appeal No. 2154 of 2008-SM
(Arising out of Order-in-Appeal No. 282-283/CE/Appl/Jal/2008 dated 23.7.2008 passed by Commissioner (Appeals), Central Excise, Jalandhar)
CCE, Jalandhar Appellant
Vs.
M/s Mohindra Enterprises Respondent
Appearance :
Appeared for Appellant : Shri K.P. Singh, DR
Appeared for Respondent: Shri Poojan Malhotra, Advocate
Date of Hearing: 10.8.2010
CORAM: HONBLE MR. D.N. PANDA, JUDICIAL MEMBER
Order No.dated.
Per D.N. Panda:
Ld. DR Shri K.P. Singh vehemently opposes the decision taken by the ld. Appellate Authority below exonerating the Respondent from penal consequence of law in respect of penalty imposable under Rule 57-I and Rule 173Q of Central Excise Rules, 1944. His substantial argument is that grant of notification having been abused, the Authorities should not have casually granted relief to the Respondent. The notification in question has imposed obligation on the Authorities to confirm that the goods have been received from the manufacturer with accompanying evidence and suffered duty in terms of Section 3A of the Central Excise Act, 1944. Also the notification requires to examine where the goods have suffered duty and whether duty was deposited into the treasury by the manufacturer. Therefore this is a fit case for penalty and both the Authorities below should not have made the Respondent charge free. He specifically submits that Revenues grievance is that the point for decision and reasons of decision appearing from the order does not appeal to common sense. Revenue although is most concerned with the decision but equally is concerned with reasons of decision.
2. According to ld. DR, demand involved although is immaterial but the principles involved in a decision is significant. Therefore he draws attention to appreciate the case from the root of the matter submitting that when the Respondent failed to give declaration that the goods have suffered duty which is patent from show cause notice and the manufacturer has not deposited the duty, Revenue should not be prejudiced. According to him, what that was the penalty proposed by the show cause notice should be levied.
3. Ld. Counsel Shri Poojan Malhotra on behalf of the Respondent supports the order of the Authority below submitting that entire examination of the materials on record has been done by both the Authorities below. Merely because the manufacturer has not deposited the duty, this Respondent should not suffer. Further when there was penalty under Rule 173Q of Central Excise Rules 1944, there was no penalty leviable under Rule 57-I of the said Rules. Such a decision of the Adjudicating Authority was upheld by the ld. Appellate Authority below. For no evidence brought out by Revenue to suggest that they have a case of contravention of law by the Respondent, the matter should not be reopened.
4. Heard both sides and perused the record.
5. It may be stated that fraud nullifies even a decree, once the transaction suffers from vice of fraud. No doubt the Respondents conduct may not be impeachable without deliberate contravention and collusion with the manufacturer who has issued the invoice. The manner of examination done by the ld. Adjudicating Authority is not satisfactory. His order does not throw light why he has failed to examine the returns where the declaration was required according to the show cause notice. Also ld. Adjudicating Authority has failed to examine whether the goods which were subject matter of the invoices have suffered compounded levy under Section 3A. In view of failure of the examination that is apparent from the Adjudication order, the decision that has flown is unreasoned. When the show cause notice had proposed, penalty under two different rules, the Authorities while deciding the issue should come to a conclusion whether action under both the rules warranted or unwarranted. When the order is cryptic that does not meat judicial scrutiny. It may be stated that two wrong cannot make third wrong right. Because some relief was granted according to the citation made by the ld. Adjudicating Authority this case may not be within the four of the decisions. Therefore unreasoned and cryptic order should go back to him restoring the matter for examination of the ingredient of the penalty provision when a clear mandate was there in the show cause notice for levy of penalty under both the rules.
6. It is needless to mention that the Authority should not casually make an approach because notification has granted relief. Notification being an outcome from the subordinate legislation should not frustrate the object of the statute. If Revenue has not been prejudiced by any of the conduct of the Respondent, there should be no hesitation to grant relief. But what that is required is that a clear case should be patent to demonstrate that a case made out by the show cause notice whether exists or not and whether ingredients of levy of penalty is present. Also it should be looked into as to whether the manufacturer had any connection with buyer of the goods causing prejudice to the interest of Revenue. It is expressly made clear that there is no pre-conceived decision taken by above paragraphes in this case but this being found to be a case causing prejudice to the Revenue, remand has been warranted and thus directed. The matter has been therefore remanded to the ld. Adjudicating authority who shall be free to decide the issue afresh granting fair opportunity of hearing on the basis of the materials on record and law of the land. If the ld. Adjudicating authority does not find any contemptuous conduct of the Respondent the Respondent may not be unreasonably dealt by penal provision of law. Setting aside both the orders the matter is remanded to ld. Adjudicating Authority.
(Dictated & pronounced in open Court) (D.N. PANDA) JUDICIAL MEMBER RM