Customs, Excise and Gold Tribunal - Mumbai
Girish Textile Industries vs Commissioner Of C. Ex., Mumbai-Ii on 4 January, 2002
Equivalent citations: 2002(143)ELT570(TRI-MUMBAI)
ORDER J.H. Joglekar, Member (T)
1. On hearing both sides, on the stay applications, it appeared that the issue being small, the appeals themselves could be disposed of. Both sides agreeing, this was done.
2. On 28-9-98, M/s. Girish Textiles Industries cleared a consignment of fabrics covered by an invoice issued under Rule 52A of the Central Excise Rules. The consignment was interpreted and was found to be in order. The duty was shown to have been paid partly through PLA and partly through Deemed Credit Register. However, against the entry numbers shown in the invoice, contra entries were not found to be made in the two Registers. The Assessee paid both B.E.D. and E.D. on the same day. Notice was issued on 23-12-99 seeking to adjust the duties, imposing penalties and also seeking to disallow the deemed credit taken and used for payment of part of duty. The Joint Commissioner on hearing the assessees, confirmed the duties, denied the credit and imposed penalties under Section 11AC and under CEA, 1944 on the Company and under Rule 209A of the Central Excise Rules, 1944 on the power of attorney holder, Shri D.C. Jain, the second appellant today. The Company and Shri Jain filed appeals which were disposed of by the common order. The Commissioner rejected the continued defence that the clerk after making the first entry had gone out for lunch and would have completed the PLA and other entries on his return. He termed the act as the modus operandi to clear more consignments on the same invoice. On his confirming the lower orders, the present appeals have been filed.
3. Shri D.H. Mehta submit the same grounds as were made before the Commissioner. He submits that the Commissioner has not given any reasons for upholding the denial of deemed credit. It is his submission that an inadvertent error could not be termed as an act of clandestine removal invoking provisions of Section 11 AC of the Act and also those of Para 6 of Notification No. 29/96-Central Excise (N.T.), dated 3-9-96. Shri Sarkar supports the impugned orders.
4. I have considered the submissions. The facts are not disputed. The Show Cause Notice shows that at the time of initial inquiries also the claim was made by Shri Jain that the clerk had gone out for food and that he would have completed the entries on his return. This submission has not been shown to be wrong by the Department. The statement of the clerk, if taken, is not on record. The invoice on his face does show the serial numbers in the two Registers where the duty would have been debited. If the intention was that of clandestine removal, then the assessees would have omitted making any entries; or even making an invoice. It is true that in a number of cases, the modus of repeated removals on the same invoice has been adopted. But the lapses in the present case cannot be said to be one designed for repeated removals. In a number of cases, the Tribunal has held that where the mistake has been accepted and the duty short paid is paid immediately, there is no cause for imposition of penalty. Although, it is doubtful whether this law can be applied in all cases, in the present case, it would certainly apply.
5. On perusal of the facts and also the evidence in the form of the statement of the power of attorney holder, I find that the case of clandestine removal has not been established by the Department. Therefore, orders of reversal of Modvat credit and also of imposition of penalty under Section 11AC of the Act do not survive. In such case, the provision of Rule 226 could have been fairly raised, which has not been done in the present case.
6. In view of my findings on the appeal of the Company, orders of penalty on the power of attorney holder under Rule 209A also do not survive.
7. The appeals are allowed with consequential relief, if any.