Custom, Excise & Service Tax Tribunal
Cce, Kanpur vs M/S.Kapoor Print Pack Pvt.Ltd on 28 September, 2010
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
SINGLE MEMBER BENCH
Central Excise Appeal No.1193 of 2008
(Arising out of Order-in-Appeal No.83-CE/APPL/KNP/2008 dated 28.2.08 passed by the CCE (A), Kanpur)
For approval and signature:
Honble Mr. Justice R.M.S.Khandeparkar, President
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?
CCE, Kanpur Appellants
Vs.
M/s.Kapoor Print Pack Pvt.Ltd. Respondent
Present for the Appellant: Shri K.P.Singh, SDR
Present for the Respondent: None
Coram: Honble Mr. Justice R.M.S.Khandeparkar, President
Date of Hearing/Decision: 28.09.2010
ORAL ORDER NO._______________
PER: JUSTICE R.M.S.KHANDEPARKAR Heard Departmental Representative for the Appellants. None present for the respondents.
2. This appeal arises from the order dated 28.2.2008 passed by the Commissioner (Appeals). By the impugned order, the appeal filed by the department against the order of the adjudicating authority has been dismissed.
3. The appeal was filed on the ground that the adjudicating authority erred in failing to impose the penalty upon the respondents. The adjudicating authority by its order dated 17.10.2006 while confirming the demand of duty amounting to Rs.1,01,014/- and appropriating the said amount out of total amount that was already deposited, refrained from imposing any penalty upon the respondents on the ground that no case had been made out for imposition of the penalty. It was specifically observed by the adjudicating authority that the department failed to establish that the shortage of goods was consequent upon clandestine removal thereof. The said finding has been reiterated by the Commissioner (Appeals) on afresh analysis of the matter on records.
4. To a specific query as to whether the issue justifying the imposition of penalty under Section 11AC of Central Excise Act, 1944 was raised in the show cause notice or not, the Departmental Representative could not point out any fact apart from saying that the fact the shortage of the goods was admitted by the authorized signatory of the respondents.
5. In fact in relation to the alleged admission, the averment in the show cause notice was that a statement of Shri Rajeev Chaturvedi, Authorised Signatory of the firm was recorded on spot on 17.05.06 (RUD No.2) under Section 14 of the Central Excise Act, 1944. On being asked about the reasons of such shortage in the stock of inputs, Shri Rajeev Chaturvedi stated that he did not dispute the shortage detected by the officers and stated that the said stock was cleared from his factory premises by the factory staff, in his absence, without cover of any invoice. He also stated that he would pay the duty amounting to Rs.99,033/- and education cess amounting to Rs.1,981/- within a weeks time. There is no dispute that the said amount of Rs.1,01,014/- was accordingly deposited and had been appropriated by the adjudicating authority. The point merely relates to penalty under Section 11AC of the Act.
6. It is settled law that in case admission, the same has to be considered in its entirety and the entire statement has to be read in totality and admission can not be considered by referring to the part of the statement. So-called admission in relation to removal of stock of inputs was clearly qualified by the statement that the same was done by the staff of factory in the absence of authorised signatory. The show cause notice nowhere disclosed any investigation had been made to ascertain whether the statement was genuine or false. Neither the statement by the authorised signatory as it stood at that time was disputed by the department. The statement was not a simple admission; the admission was qualified one. The admission of removal of inputs was qualified by the statement that the said removal was not done by the authorised signatory but it was done by the staff of the factory and in the absence of authorised signatory. Being so, there was no material disclosed in the show cause notice which could reflect the intention on the part of the respondents to evade or avoid payment of duty. The essential ingredient of Section 11AC of the Act is the intention to evade duty. That was totally absent in the show cause notice, there was no question of imposition of penalty by the adjudicating authority.
7. Apart from what is stated above, there is clear finding by the lower authorities that the department has failed to produce any evidence about clandestine removal of the inputs. Nothing has been pointed out to me except the said statement while contending that there was shortage on account of clandestine removal of the goods. Being so, no fault can be found with the said concurrent finding arrived at by the lower authorities. Indeed this appeal is nothing but abuse of the process of law by the department. There was no issue raised regarding penalty in the show cause notice. There was absolutely no case for the department even to file the appeal before the Commissioner (Appeals). The Section 35EA of Central Excise Act, 1944 clearly requires the committee to apply its mind to ascertain as to whether the matter needs to be pursued in the appeal or not when the order of the adjudicating authority goes against the department. It is essentially to avoid unnecessary litigation by the government and to avoid unnecessary wastage of time of the appellate authorities as well as to avoid unnecessary expenditure in pursuing the matter. All these aspects should be borne in mind by the committee, while deciding whether the matter requires to be pursued in appeal or not. Plain reading the review order passed by the Commissioner to justify filing of the appeal clearly reflect non application of mind.
8. In the facts and circumstances of the case, the appeal is dismissed. The appeal is accordingly disposed of.
(pronounced in the open court) (JUSTICE R.M.S.KHANDEPARKAR) PRESIDENT mk 1 4