Custom, Excise & Service Tax Tribunal
Invendis Technologies India Pvt. Ltd vs Commissioner Of Central Excise, ... on 20 December, 2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Appeal(s) Involved: E/20846/2015-SM [Arising out of Order-in-Appeal No. 682/2014-CE dated 31/10/2014 passed by the Commissioner of Central Excise, Bangalore-I (Appeals)] Invendis Technologies India Pvt. Ltd. KAS Officers Colony, BTM Layout, 2nd Stage, Bangalore 560 068 Karnataka Appellant(s) Versus Commissioner of Central Excise, Customs and Service Tax Bangalore-I Post Box No. 5400, C.R Buildings, Bangalore 560 001 Karnataka Respondent(s)
Appearance:
Shri Dayanand K., CA Vishnu Daya & Co.
GF No.7, Karuna Complex, No.337, Sampige Road, Malleswaram, Bangalore 560 003 For the Appellant Shri Pakshi Rajan, AR For the Respondent Date of Hearing: 20/12/2016 Date of Decision: 20/12/2016 CORAM:
HON'BLE SHRI S.S GARG, JUDICIAL MEMBER Final Order No. 21460 / 2016 Per: S.S GARG The present appeal is directed against the impugned order dated 31.10.2014 vide which the Commissioner (Appeals) rejected the appeal of the appellant and confirmed the Order-in-Original. Briefly the facts of the case are that the appellant is engaged in the manufacture of goods falling under Chapter 85 of Central Excise Tariff Act 1985. During the course of scrutiny of self assessed electronically filed ER-1 for the period April 2011 and May 2011, it was noticed that the duty for the month of April 2011 was short paid by Rs. 3,29,827/- (Rupees Three Lakhs Twenty Nine Thousand Eight Hundred and Twenty Seven only). This short paid amount along with interest was subsequently paid on 12.07.2011 which has resulted in delay of more than 30 days from the due date. Similarly, the short paid amount of Rs. 50,551/- (Rupees Fifty Thousand Five Hundred and Fifty One only) for the month of May 2011 along with interest was paid on 12.07.2011 which has also resulted in delay of more than 30 days. On these allegations, a show-cause notice was issued to the appellant alleging the violation of the provisions of Rule 8(3A) inasmuch as by utilizing the cenvat credit for payment of duty for the period 06.06.2011 to 30.06.2011. Further as the Cenvat credit reversal is paid by PLA along with interest on 27.06.2012, it was further alleged that from 01.07.2011 to 30.06.2012, the appellant has paid the duty on monthly basis by utilizing the cenvat credit instead of paying the same on consignment basis using account current as required under Rule 8(3A). Thereafter the learned Additional Commissioner upheld the contention of the appellant and appropriated the amounts paid towards demand stating that payment of duty by utilizing the credit account is proper but he levied penalty of Rs. 1,00,000/- (Rupees One Lakh only) for failing to pay the duty on the consignment basis during the period of default under Rule 25 of the Central Excise Rules. Aggrieved by the said order, appellant filed an appeal before the Commissioner and the Commissioner (Appeals) upheld the Order-in-Original. Aggrieved by the said order, the appellant has filed the present appeal.
2. Heard both the parties and perused the records.
3. Learned counsel for the appellant submitted that the impugned order imposing penalty of Rs. 1,00,000/- (Rupees One Lakh only) on the appellant for violation of Rule 25 of the Central Excise Rules is not sustainable in law. He further submitted that the provisions of Rule 25 is subject to Section 11AC of the Central Excise Act 1944 and under Rule 25, the penalty can only be imposed on a manufacturer if he contravenes any of the provisions of the Rules or Notification issued under these Rules with intent to evade payment of duty. He further submitted that neither the learned adjudicating authority nor the appellate authority has nowhere in the impugned order or in the Order-in-Appeal alleged that the appellant had intention to evade payment of duty while delaying the payment of duty. It is only held that the appellant has contravened the provisions of Rule 8(3A) of Central Excise Rules, 2002 which has been made good by paying duty through PLA and interest. He further submitted that in para 26 of the Order-in-Original, the learned Additional Commissioner has observed as under:
a. I do not find any ingredients to hold that the assessee cleared excisable goods with intent to evade payment of duty and the show-cause notice also does not allege anything about the malafide intent of the assessee to evade payment of duty.
b. Further, the duty along with interest is paid in cash before the issuance of the Show-cause notice.
c. Hence, I do not find any intent on the part of the assessee to evade the payment of duty except the minor aberration violation of consignment-wise clearance.
d. The asseseee has only violated the provisions of the law specified with reference to Rule 25(a) in as much as the assessee has cleared excisable goods without payment of duty consignment-wise which led to breach of Rule 8(3A) of CER, 2002. 3.1. Further Rule 25 of the Central Excise Rules is applicable only when the goods are available for confiscation and when the goods are not available for confiscation, Rule 25 should not have been invoked. In support of his submission, he relied upon the decision in the case of Shree Ashok Kumar Manibhai Patel & Co. Vs. CCE, Bhopal 2011 (263) E.L.T. 279 (Tri.-Del.) wherein it has been held that the levy of penalty under Rule 25, there must be allegation of suppression or fraud etc. and hence Section 11AC should have been invoked. In the absence of such allegation levy of penalty under Rule 25 of the Central Excise Rules is not proper. Similarly in the case of Alfa Auto Industries Limited Vs. CCE 2010 (262) E.L.T. 573 (Tri.-Del.) it has been held that the offences of the nature committed by the appellant, applicable Rule is Rule 27 of the Central Excise Rules and the penalty imposed under Section 25 was set aside.
4. On the other hand the learned AR reiterated the findings of the impugned order.
5. After considering the submissions of both the parties and perusal of the record, I am of the considered opinion that the impugned order imposing penalty for violation of Rule 8(3A) is not sustainable in law as the default has been rectified by the appellant by payment of duty along with interest which has been appropriated by the Additional Commissioner. Further Additional Commissioner has observed in para 26 cited supra that there is no intention to evade payment of duty. Further for invoking Rule 25 there has to be an intention to evade payment of duty which is absent in the present case. Therefore in view of the decisions cited supra, I am of the considered opinion that the imposition of penalty on the appellant under Rule 25 of Central Excise Rules 2002 is bad in law and therefore I set aside the penalty imposed by allowing the appeal of the appellant.
(Operative portion of the Order was pronounced in Open Court on 20/12/2016) (S.S GARG) JUDICIAL MEMBER iss