Custom, Excise & Service Tax Tribunal
Rashi Peripherals Pvt Ltd vs Daman on 30 July, 2018
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No.E/981-982/2010-DB
[Arising out of OIA-AKP/370-372/DAMAN/SDMN/2009-2010 dated 29.03.2010 passed by Commissioner
of Central Excise, Customs and Service Tax-DAMAN]
M/s Rashi Peripherals Pvt Ltd Appellant
K K Choudhary
Vs
C.C.E. & S.T.- Daman Respondent
Represented by:
For Appellant: Shri Sachin Chitnis (Advocate) For Respondent: Shri S.N. Gohil (AR) CORAM:
HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. RAJU, MEMBER (TECHNICAL) Date of Hearing: 17.07.2018 Date of Decision: 30.07.2018 Final Order No. A/ 11579-11580 /2018 Per: Ramesh Nair The brief facts of the case are that the appellant are engaged in manufacture of computer system. They are selling that product through their depot. The price charged at the time of sale from the depot is higher than the price declared at the time of clearance of goods from the factory. The claim of the appellant is that since there are some addition at depot such as monitor, key-board etc, hence the value on that count is not includible. The case of the department is that the value which was charged to the customer for sale of goods from depot shall be taken as transaction value and excise duty is payable on such value.
2. The adjudicating authority confirmed the demand and penalty under Section 11AC with interest and also imposed penalty on Sh. K K Choudhary director of the Company under Rule, 26. The Commissioner (Appeals) in the appeal filed by the appellant upheld the order in original, thereafter, the
2|Page E/981-982/2010-DB appellant filed appeal before this Tribunal. The appellant before the Tribunal given up the issue of demand of differential duty on merit, however they sought relief on account of cum duty price and penalties. The Tribunal remanded the matter to the adjudicating authority wherein the adjudicating authority re-confirmed the entire proposal. In the second round the appellant filed appeal before Commissioner (Appeals) who reduced the demand of differential duty from Rs. 4,30,161/- to Rs. 3,80,912/- on the ground that the differential amount has already been paid. The penalty was also reduced to Rs. 3,80,912/- and the penalty on Sh. K K Choudhary was reduced to Rs. 20,000/-.
3. Sh. Sachin Chitnis Ld. Counsel appearing on behalf of the appellant argued on the issue of cum duty price and penalties, however after some length of argument Sh. Sachin Chitnis concedes they are not pressing for issue of cum duty price. However, he strongly submits that the penalty under Section 11AC was imposed by the adjudicating authority but no option of 25% penalty under the proviso of Section 11AC was given in the order in original, the same may be extended by this Tribunal. He also prays for waiver of penalty on the Director as there is no malafide intention of the appellant. He placed reliance on the following judgment:
Exotic Associates 2010 (252) ELT 49 (Guj)
R.A.Shhaikh Paper - 2010 (259) ELT 53 (Guj)
R.A.Shhaikh Paper -2010 (335) ELT 203 (SC)
Gopal Fibres -2010 (256) ELT 10 (Guj)
Harish Silk Mills - 2010 (255) ELT 393 (Guj)
CESTAT Order No.A/85836-86839/17/SMB dated 10.02.2017 in the
case of M/s Noble Drugs Ltd.
CESTAT Order No. A/89237/17/SMB dated 11.08.2017 in the case of
Aqua Alloys P.Ltd.
4. We have carefully considered the submission made by both the sides and perused the records. Since the Ld. Counsel does not press on the issue of cum duty price, we uphold the demand of differential duty upheld by the Ld.
3|Page E/981-982/2010-DB Commissioner (Appeals). As regard the penalty imposed under Section 11AC, we observed that the adjudicating authority has not extended the option of 25% penalty in the order in original. It is settled by the Hon'ble Gujarat High Court in the case of R.A. Shaikh Paper (Supra), this was upheld by the Hon'ble Supreme Court that it is necessary on the part of the adjudicating authority to give the option of 25% penalty. The board in the CBEC Circular No. 208/07/2008-CE-6 dated 22.05.2008 also directed the adjudicating authority that it is necessary to give option in writing in the order in original, as regard reduced penalty of 25% in terms of proviso of Section 11AC, accordingly, we reduce the penalty to 25% under Section 11AC subject to payment of differential duty, interest and 25% penalty within a period of 30 days from receipt of this order. Taking into consideration over all facts and circumstances of the case, we find that the director Sh. K.K. Choudhary could not have been implicated as the issue involved is interpretation of valuation provision, accordingly the penalty imposed on Sh. K.K. Choudhary under Rule 26 is set aside.
5. In the result appeal of the company is partly allowed in the above terms and appeal filed by Sh. K.K. Choudhary is allowed.
(Pronounced in the open court on 30.07.2018)
(Raju) (Ramesh Nair)
Member (Technical) Member (Judicial)
Seema