Customs, Excise and Gold Tribunal - Tamil Nadu
Commissioner Of Central Excise vs Easwaran & Sons Engg. Ltd. on 27 March, 2003
Equivalent citations: 2003(88)ECC103
JUDGMENT S.L. Peeran, Member (J)
1. Both these Revenue appeals arise from a common order in appeal Nos. 140/99 (M-I) and 21/99 (M-I)(D) dated 31.12.99 passed by the Commissioner (Appeals). The lower authority had imposed mandatory penalty under Rule 57-1(4) besides penalty of Rs. 10/000 on the assessee under Rule 173Q of the Central Excise Rules, 1944 for the alleged violation of Modvat credit provisions as alleged in the show cause notice. The Commissioner (Appeals) took the view that Rule 57-1(4) was not in force at the time when the violation had been committed. Therefore, he held that the penalty under Rule 57-1(4) cannot be imposed. Besides, he has also taken a view that Rule 57-I(4) applies only where credit of duty paid on any inputs had been taken wrongly by reasons of fraud, collusion or any wilful mis-statement or suppression of fact with any intent to evade-payment of duty and not where it is on account of lapse of not reversing the credit. Therefore, he upheld the parties contention that the provisions of Rule 57-1(4) are not invocable. He adopted the reasoning given by him in his earlier order No. 159/99 (M-II) dt. 5.11.99 rendered in the case of M/s. Kone Elevators. With regarding to the imposition of penalty under Rule 173Q he noted that the party had paid the duty even before the issue of show cause notice and mala fide had not been proved. In this regard he relied on the judgment rendered in the case of Siemens Ltd., 1999 (34) RLT 831 (CEGAT). He also rejected the department appeal before him seeking for enhancement of the mandatory penalty under Rule 57-1(4) for equivalent to the amount of duty evaded on the entire clearances made i.e. even before the period earlier to 28.9.96. He followed his earlier Order-in-Appeal No. 20/99 (M-III)(D) dt. 24.8.99 rendered in the case of M/s. Jay Flash Ceramics wherein he had taken into consideration large number of judgments to hold that three times of penalty need not be imposed as held by the Apex Court in the case of Marcandy Prasad Radhakrishna Prasad Pvt. Ltd., 1999 (107) ELTA-121. The Revenue is aggrieved with the impugned order in setting aside the penalty imposed under Rule 57-I(4), under Rule 173Q and also for not accepting the Revenue Appeal seeking for higher imposition of mandatory penalty.
2. Ld. DR argued on the basis of the grounds made out in the appeal memorandum. He prayed for setting aside the impugned order and passing an appropriate speaking order.
3. Ld. Counsel Shri V. Balasubramanian for the Respondents pointed out that the Rule 57-1(4) although contemplates for imposing three times the penalty but it is left to the discretion of the adjudicating authority and this point has been upheld by the Apex Court in the judgment rendered in the case of Marcandy Prasad Radhakrishna Prasad Pvt. Ltd. He also submitted that the Rule 57-I(4) applies only where the credit of duty has not been paid on inputs and it has been taken wrongly by reason of fraud, wilful mis-statement, etc. with an intent to evade payment or duty. The Commissioner (Appeals) had relied on his earlier order rendered in the case of Kone Elevators Ltd. (supra). That order came up for consideration before the Tribunal and the Tribunal rejected the Revenue's appeal as cited in CCE v. Kone Elevators Ltd., 2002 (51) RLT 206 (T). The Tribunal referred to other judgments as well as Apex Court judgment rendered in the case of CCE, Coimbatore v. L.G. Equipments Ltd. He further submitted that the very issue having been decided by the Tribunal in the case referred to and the order being a speaking and correct order, therefore, the appeals are required to be dismissed.
4. On a careful consideration, I note that the Commissioner (Appeals) has passed the order by following his earlier order rendered in the case of Kone Elevators Ltd. The Revenue was aggrieved with that order and the Tribunal after due consideration upheld the Commissioner (Appeals) order and the Tribunal has clearly noted various judgments including the Apex Court ruling rendered in the case of CCE, Coimbatore v. L.G. Equipment Ltd., 2001 (42) RLT 974 and dismissed the Revenue's appeal. The Tribunal noted that when an initial credit is not wrongly taken on account of fraud, collusion, mis-statement, suppression of facts etc. then in such an event Rule 57-I(4) will not be invocable. I note that when Rule 57-I(4) is not invocable in the circumstances as explained by the Tribunal in the case of Kone Elevators Ltd., therefore, enhancing the mandatory penalty does not arise as contended by the Revenue, In that view of the matter I do not find any infirmity in the impugned order. The order of the Commissioner (Appeals) is supported by number of decisions as has been noted in the case of Kone Elevators Ltd. In that view of the matter and there being no merit in the appeals, both the appeals are therefore dismissed.