Custom, Excise & Service Tax Tribunal
M/S Analogics Tech India Ltd vs The Commissioner on 9 September, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Bench Single Member Bench
Court I
Appeal No.E/26844/2013
(Arising out of Order-in-Appeal No.12/2013(H-III)CE,
Dated 28-02-2013 passed by Commissioner of C.CE&ST
(Appeal-I&III), Hyderabad)
For approval and signature:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial)
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 Lordship wish to see the fair copy of the Order?
4.
Whether Order is to be circulated to the Departmental authorities?
M/s Analogics Tech India Ltd.
..Appellant(s)
Vs.
The Commissioner.
C.C.E&ST, Hyderabad-III
..Respondent(s)
Appearance Shri B.Venugopal, Advocate for the Appellant Shri Arun Kumar, AR for the Respondent Coram:
Honble Ms. Sulekha Beevi, C.S., Member(Judicial) Date of Hearing : 09/09/2016 Date of decision: 09/09/2016 FINAL ORDER No._______________________ [Order per: Sulekha Beevi, C.S.,]
1. The appellant is aggrieved by the imposition of penalty under Section 11 (AC) of the Central Excise Act, 1944
2. The appellants are engaged in the manufacture of Hand Held Computers and GSM /GPRS modems falling under Chapter Heading No.8471 and 85247 of Central Excise Tariff Act, 1985.
3. On an intelligence gathered that M/s Analogics Tech India Ltd., Uttarakand is wrongly availing the benefit of duty exemption by willful mis-declaration of their products, the officers of Central Excise, Meerut-I Commisisonerate conducted investigation of the said unit on 16-09-2011. During the course of investigation the officers noticed five numbers of GSM/GPRS modems of Model No.AC 626 bearing S.No.00069G11 to 00074G11 and the name of manufacturer was noted to be that of appellant herein /Analogics Tech India Ltd, Hyderabad. As the Uttarakand unit could not produce any documentary evidence in support of payment of excise duty on such modems, an investigation was conducted in the premises of appellant unit at Hyderabad on 29-02-2012. During the course of the verification, it was noticed that appellant has been clearing the manufactured goods, such as GSM/GPRS modems without payment of excise duty for demonstration purpose to Uttarakand unit. The appellant calculated the excise duty liability of clearances made for demonstration purpose for the period from 2007-08 to 2011-12 and paid an amount of Rs.1,28,765/- towards duty and Rs.33,760/- towards interest and also Rs.2,176/- being 1% penalty on the clearance made during the period from 01-04-2011 onwards. Consequently, they requested for waiver of issuance of show cause notice. However, a show cause notice dated 10-05-2012 was issued to the appellant, proposing for duty demands of Rs.1,28,765/- along with interest and also for imposition of penalty U/s 11AC r/w Rule 25 of Central Excise Rules. It was also proposed to appropriate an amount of Rs.1,64,611/- paid by appellant towards liability of duty, interest and 1% penalty.
4. After due process of law, the adjudicating authority confirmed the duty demand, interest and imposed penalty of Rs.1,28,765/- U/s 11 AC of Central Excise Act, 1944. In appeal, the Commissioner(Appeals) upheld the same. Being aggrieved, the appellants are before the Tribunal.
5. On behalf of the appellant the Ld. Counsel Shri B.Venugopal submitted that the appellant had cleared the goods to their Uttarakand unit for the purpose of demonstration only. As they were sent on returnable basis for Demo, no duty was paid. The appellant were under the genuine impression that no duty was required to be paid, as the goods were cleared for demonstration purpose and would be received back to their factory at Hyderabad. That it was not a case of clandestine clearance and therefore, the imposition of penalty is highly harsh on the appellants. It was also submitted that appellants paid the duty and the interest before the issuance of show cause notice and for this reason also, the imposition of penalty is not legal or proper.
6. On behalf of the department Ld. AR Shri Arun Kumar defended the findings in the impugned order. He submitted that the appellant has been clearing the goods out of their factory without payment of excise duty. This fact that the appellant is clearing goods for Demo purpose, without payment of duty, would not have come to light, had not the department conducted the investigation. That the appellant has not maintained any records for clearing of goods for demonstration purpose and also while goods are being received back in the factory. It is a clear case of suppression of facts with an intent to evade duty and therefore, the penalty imposed is just and proper. He also submitted that the appellant has paid the duty liability for the period 2007-08 to 2011 -12 (five years) and therefore, the appellant is liable to pay the mandatory penalty under Sec 11 AC of the Act.
7. I have heard both sides. The appellant has challenged the levy of equal amount of penalty imposed U/s 11 AC of Central Excise Act, 1944. The appellant does not challenge the payment of duty of Rs.1,28,765/- and the interest thereon. The said amount is the duty demand for the period 2007-08 to 2011-12. In the instant case, the appellant had cleared the goods without payment of duty to the Uttarakand unit. From the records it is seen that the goods when sent for demonstration purpose would be assigned separate identification serial number and when these goods were received back into the factory of the appellant, they would be sent to the production section. And after assigning a regular number, the same would be cleared under invoice on payment of Central Excise Duty. Such contention is not acceptable. That as the Demo samples were not meant for sale and would be returned back after demonstration, and having no commercial value, the appellant had not discharged their duty liability. Though it may be for demonstration purpose, the appellant has to maintain proper records for such clearances. The appellant has failed to keep any such records. In the absence of any interference on behalf of the department, the appellant would have continued to clear the goods for demonstration purpose without payment of duty. The non-maintenance of records while clearing the goods out of the factory, is a strong indication of suppression of facts with intention to evade payment of duty . The appellants have also not disclosed such removals in any of their statutory records or in the ER -1 Returns. When there is no records for removal of goods and no corresponding records for receiving back the goods, the evasion of duty would not have come to light but for the inspection conducted in their Uttarakand unit. Therefore, their explanation that the goods were removed for demonstration purpose and without intent to evade payment of duty is not tenable. It is seen from the order in original that the adjudicating authority has for the very same reason not accepted the plea of ignorance of law by the appellant. From the facts presented as above, the appellants who were engaged in manufacture of goods ought to have maintained some records while clearing the goods to Uttarakand unit. The contention of the appellant that they did not pay the duty due to ignorance cannot be accepted. In my view, the ingredient required for invoking the penal provisions U/s 11 AC of Central Excise Act, 1944 are established and therefore, I do not find any ground to set aside the penalty imposed.
8. In the result, the impugned order is sustained. Appeal is dismissed.
(Operative part of this order was pronounced in court on conclusion of the hearing) ( SULEKHA BEEVI, C.S.) MEMBER(JUDICIAL) ..dks 6