Customs, Excise and Gold Tribunal - Tamil Nadu
Industrial Controls And Kiruthika & Co. vs Commissioner Of Central Excise, ... on 9 November, 2001
JUDGMENT
S.L. Peeran
1. Both these appeals have been filed against the common order in original No. 193/96 dated 17.12.1996 by which the Commissioner has confirmed a duty demand of Rs. 64,217/- under Rule 9(2) of the CE Rules, read with Section 11A(2) of the CE Act, 1944. Duty is confirmed for clearing of the goods during the period 1991-92 and 1992-93 by the appellants Industrial Controls. There is a mandatory penalty of equal amount of duty on the appellants Industrial Controls under Section 11AC read with Rule 173Q of the CE Rules, 1944.
2. The appeal of the other appellant Smt. G. Jayamani, Proprietrix of M/s Kiruthika & Co. is against imposition of penalty of Rs. 5,000/- under Rule 209A of the CE Rules, 1944 for the reason that the appellants have abetted with the other appellants to evade payment of duty for the reasons given in the impugned order.
3. Shri G. Ramesh, learned Chartered Accountant for the appellants submitted that he is not contesting the duty liability on M/s Industrial Controls. He submits that during the relevant period, when the goods were cleared, Section 11AC was not in existence This Section came into operation only with effect from 28.9.96 and no penalty under this Section can be imposed prior to this date as held by the Hon'ble Supreme Court in the case of CCE v. Elgi Equipments Ltd. reported in 2000 (128) ELT 52. He further submits that Smt. G. Jayamani Proprietrix has not committed any offence for imposing penalty on her under Rule 209A of the CE Rules, 1944. Therefore, he submitted that the penalties on both the parties should be set aside.
4. The learned SDR submits although Section 11AC was not in vogue at the relevant time, penalty under Rule 173Q has been correctly imposed and it should be sustained. As regards penalty on the other appellant i.e. Smt. G. Jayamani, Proprietrix under Rule 209A of the CE Rules, he submits that the Commissioner has recorded a finding that this appellant has abetted in evading payment of duty and hence imposition of penalty on this appellant is justified.
5. On consideration of the submissions made, and on perusal of the records, we notice that the Commissioner has given a clear finding as to how the appellants Industrial Controls have evaded payment of duty and hence imposition of penalty on appellant G. Jayamani Proprietrix under Rule 209A of the CE Rules is justified and we uphold the same. So far as penalty on the other appellants viz. Industrial Controls is concerned, we notice that penalty has been imposed on them under Section 11AC read with Rule 173Q of the CE Rules, without bifurcating under each provisions of the law. He should have bifurcated the penalty under the two separate provisions of law. The Hon'ble Supreme Court in the case of CCE v. Elgi Equipments Ltd. reported in 2001 (128) ELT 52 (sc) has held that mandatory penalty under Section 11AC cannot be imposed for an offence committed prior to the insertion of this Section as its operation will be prospective and not retrospective. There is an apparent error committed by the Commissioner in imposing a combined penalty under two provisions of the law. The Commissioner should have imposed penalty under Rule 173Q if warranted. The learned CA submitted that there was no ground for imposition of penalty under Rule 173Q as there was no intention to evade payment of duty. So far as demand of duty is concerned, we confirm the same. We, therefore, remand the matter for de novo consideration of the matter in so far as imposition of penalty on appellants Industrial Controls under Rule 173Q is concerned. The appellants Industrial Controls shall be heard on the aspect of imposition of penalty under Rule 173Q, before an order is passed.
6. In the result, the appeal of Industrial Controls is remanded to the Commissioner for decision afresh in regard to imposition of penalty under Rule 173Q of the CE Rules, while the appeal of the other appellant Kiruthika & Co. is dismissed.
(Dictated and pronounced in open Court)