Custom, Excise & Service Tax Tribunal
4. Whether Order Is To Be Circulated To ... vs M/S Ornet Intermediates Ltd on 7 May, 2010
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
WEST ZONAL BENCH AT AHMEDABAD
COURT:
II
Appeal No.E/4166/2005
Arising out of: OIA No.290 to 292/2005(Ahd-I)(AA/A-IV), dt.15.9.05
Passed by: Commissioner of Central Excise & Customs (Appeals), Ahmedabad
For approval and signature:
Honble Mrs. Archana Wadhwa, Member (Judicial)
1. Whether Press Reporters may be allowed to see the No
Order for publication as per Rule 27 of the CESTAT
(Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
Appellant:
M/s Ornet Intermediates Ltd.
Respondent:
CCE Ahmedabad Represented by:
None for the Assessee; Shri S.K. Mall, SDR for the Revenue. CORAM:
MRS. ARCHANA WADHWA, MEMBER (JUDICIAL) Date of Hearing/Decision:07.05.10 ORDER No. /WZB/AHD/2010 Per: Mrs. Archana Wadhwa:
On matter being called, neither anybody is present nor is there any adjournment request on record. I also note that on earlier occasions also, the appellants were unrepresented. Accordingly, I heard the learned SDR. The matter stand listed as a result of remand order by the Honble High Court of Gujarat, vide which the penalty amount is required to be readjudicated in the light of the law declared by Honble Apex Court in the case of Dharmendra Textile Processors 2008 (231) ELT 3. It is seen that the Tribunal vide its Order No.A/810-812/WZB/2006/C-IV, dt.14.2.06, had set aside the entire penalty imposed upon the appellant in terms of Section 11AC of Central Excise Act, on the ground that duty was deposited before issuance of show cause notice. The said order was appealed against by the Revenue before Honble High Court, who passed the following order:
The questions raised in this appeal are required to be considered by the Tribunal in light of the judgment of the Apex Court in case of Dharmendra Textile Processors 2008(231) ELT 3.
Therefore, the order of the Tribunal is set aside. The matter is remanded to the Tribunal for passing fresh orders in accordance with law. The question of applicability of proviso to Section 11AC will also be considered and examined by the Tribunal while deciding the matter afresh. The Tribunal shall pass fresh order within a period of 3 months from the date of receipt of a copy of this judgment.
The appeal stands disposed of accordingly.
2. As is clear from the above, the question of applicability of proviso to Section 11AC is also required to be examined. I find that the said proviso was examined by the Tribunal in the case of CCE Vadodara Vs. Swati Chemical Industries Ltd. 2009 (248) ELT 421 (Tri-Ahmd.).
3. For better appreciation, I reproduce Para 4, 5 & 6 of the said judgment.
4. However, at this stage I take note of the first and second Proviso to Section 11AC, which were not the subject matter of the Honble Supreme Courts judgment. In terms of the said Proviso, if duty and interest is paid within thirty days from the date of communication of the order, the amount of penalty liable to be paid shall be 25% of the duty so determined. Second Proviso is to the effect that the benefit of the first Proviso would be available provided the reduced penalty is also paid within the period of thirty days referred to in that Proviso. The 3 & 4 Proviso to Section 11AC are to the effect that if the penalty is enhanced by the appellate authority, the benefit of reduced penalty shall be available if the amount is deposited within a period of thirty days of the communication of the said order.
5. The said Provisos were the subject matter of consideration of their Lordships of Punjab & Haryana Court in the case of Commissioner of Central Excise, Rohtan Vs. JR Fabrics Pvt. Ltd. reported in 2009 (238) ELT 209 (P & H) . After taking note of the Honble Supreme Courts judgment in the case of Dharmendra Textile Processors, it was observed that when the Adjudicating Authority as also Commissioner (Appeals) acted illegally and contrary to the first Proviso to Section 11AC of the Act, and no option to pay the dues and penalty of 25% within 30 days was given to the assessee the fault lies with the authorities and not with the assessee. As such the Honble Delhi High Courts decision in the case of Malbro Appliances Pvt. Ltd. reported in 2007 (208) ELT 503 (Tri.-Del.) and KP Pouches Pvt. Ltd. judgment reported in 2008 (228) ELT 31 Delhi was concurred with.
6. In terms of above judgment of Honble High Court of Punjab & Haryana, the orders not giving such an option to the assessees are illegal and have to be set aside. If that be so, the matters need to be remanded for adjudging penal liabilities in terms of Apex Courts judgment in the case of Dharmendra Textiles, along with extending option in terms of 1st and 2nd Proviso to Section 11AC. In such a scenario, the period of 30 days to deposit the dues along with 25% of penalty shall start running from the date of passing fresh orders by the adjudicating authority. However, instead of adopting the above route, penalties can be enhanced at appellate level with option to deposit reduced penalties along with other dues within a period of thirty days from the date of passing appellate orders, in terms of 3rd and 4th Proviso to Section 11AC.
4. Inasmuch as in the present case, the entire dues were paid before issuance of show cause notice, the penalty amount is required to be reduced to 25% of the duty amount in terms of proviso to Section 11AC and in the light of judgment in the case of Swati Chemical Industries. Accordingly, the penalty is reduced to 25% of the duty amount. The interest, in terms of proviso to Section 11AB as it stood at the relevant point of time, is also confirmed and the same if attracted, would be quantified by the jurisdictional authority.
5. It is made clear that reduced penalty and interest, if any, shall be paid by the appellant within thirty days from the passing of the present order. In case, the said conditions are not complied with by the assessee, the penalty would automatically get enhanced equal to the duty amount.
6. Appeal is disposed of in above terms.
(Dictated & Pronounced in Court) (Archana Wadhwa) Member (Judicial) cbb ??
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