Custom, Excise & Service Tax Tribunal
Naranja Sahakari Sakkare Karkhane Ltd vs Commissioner Of Central Excise And ... on 19 March, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/824/2009-SM [Arising out of Order-in-Appeal No. 226-2009 dated 02/06/2009 passed by CCE(Appeals), Mangalore] For approval and signature: HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 1 Whether Press Reporters may be allowed to see 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 of the Order? 4 Whether Order is to be circulated to the Departmental authorities? NARANJA SAHAKARI SAKKARE KARKHANE LTD IMAMPUR VILLAGE, (NEAR JANWADA) BIDAR Appellant(s) Versus Commissioner of Central Excise and Service Tax MANGALORE NULL 7TH FLOOR...TRADE CENTRE, BUNTS HOSTEL RD., MANGALORE, - 575003 KARNATAKA Respondent(s)
Appearance:
Shri PRADYUMNA G.H., Advocate NO. 244, 1ST CROSS, Banashankari 3rd Stage, 2nd Block BANGALORE - 560085 KARNATAKA For the Appellant Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent Date of Hearing: 19/03/2015 Date of Decision: 19/03/2015 CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 20795 / 2015 Per : B.S.V. MURTHY The appellant is engaged in the manufacture of sugar and molasses. The appellant during the month of June 2007 according to their own records reflected that they have cleared 2139.4 MTs of molasses to katcha pit by making entry in the Daily Stock Register (DSR for short). A statement was recorded from the Chief Accounts Officer on 26/11/2007 wherein he admitted that it was a mistake committed by the appellant. He agreed that they should have paid the duty chargeable on the molasses cleared to katcha pit at the time when they made entry in the DSR. Subsequently in May 2008, the appellant paid the entire amount of duty with interest. Proceedings were initiated by issuing the show-cause notice on 01/04/2008 to demand the duty, interest and imposition of penalty. The proceedings have culminated in confirmation of demand and appropriation of the amounts paid and further imposition of penalty of Rs.50,000/- on the appellant under Rule 25 of Central Excise Rules, 2002.
2. Learned counsel on behalf of the appellant relied upon the decision of this Tribunal in the case of The Bidar Sahakara Sakkare Karkhane Ltd. vide Final Order No.1173/2010 dt. 10/06/2010 to submit that storage of molasses in katcha pit does not amount to removal and duty on molasses is payable only when molasses is removed from the factory. In this case, the molasses was stored in katcha pit and the appellant paid the duty at the time of removal with interest. It is his submission that there was no omission on the part of the appellant at all. They had paid the duty correctly and there was no need to pay interest, which they paid. Further he submits that under the circumstances, no penalty could have been imposed since duty itself was not payable when molasses was stored in katcha pit.
3. I have considered the submissions. On going through the records, I find that there is a finding that the appellants in their DSR had shown removal of molasses to katcha pit. This means that the appellants themselves had treated removal of molasses to katcha pit as removal in accordance with the provisions of law. That being the position, it would not be appropriate to take a view in favour of the appellant that there was no removal. Having treated the storage in katcha pit and removal to the katcha pit as a removal, as per the provisions of Rule 8 of Central Excise Rules, 2002, the appellant should have discharged the duty liability without any further proceedings being initiated by the Revenue. In this case, in November 2007 itself this was brought to the notice of the appellant and the Chief Accounts Officer had given a statement admitting that it was a mistake. Even then, the entire liability came to be discharged only in May 2008. On merits, I do not find a case in view of the clear stand taken by the appellant themselves for whatever reasons right or wrong. However at this stage, learned counsel submits that since the matter has travelled right upto the Tribunal, some concession may be given at least as regards the quantum of penalty. He submits that it was a mistake on the part of the appellants. They could have clearly entered the stock in the DSR in which case even if the molasses was stored in katcha pit, in terms of the order of the Tribunal, no duty would have become payable. In fact the appellant has lost the interest portion which they could have saved if they were to maintain the stock in the katcha pit in the DSR. For a mistake, penalty of Rs.50,000/- is very high according to him. I am also inclined to agree with the submission. Accordingly, I consider that some reduction in penalty is warranted. In view of the above discussion, demand for duty and interest is sustained and upheld. Penalty under Rule 25 of Central Excise Rules, 2002 imposed on the appellant is reduced to Rs.25,000/- (Rupees twenty five thousand only). The appeal is disposed of in above terms.
(Order pronounced and dictated in open court) B.S.V.MURTHY TECHNICAL MEMBER Raja 4