Custom, Excise & Service Tax Tribunal
Gangotri Textiles Ltd vs Pune - Ii on 22 September, 2010
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI APPEAL NO: E/2985/2003 (Arising out of Order-in-Original No: 9/CEX/2003 18/07/2003 passed by the Commissioner of Central Excise, Pune - II.) For approval and signature: Hon'ble Shri S.S. Kang, Vice President Hon'ble Shri S.K. Gaule, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : Yes 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes Gangotri Textiles Ltd. ...Appellant Vs Commissioner of Central Excise Pune - II. ...Respondent
Appearance:
Shri M.A. Nyalkalkar, Advocate for the appellant Shri N.A.Sayyed, Authorised Representative (JDR) for the respondent CORAM:
Hon'ble Shri S.S. Kang, Vice President Hon'ble Shri S.K. Gaule, Member (Technical) Date of decision: 22/09/2010 ORDER NO: ____________________________ Per: S.S. Kang, Vice President Heard both sides.
2. Appellant have filed this appeal against the impugned order whereby demand of Rs. 1,31,624/- has been confirmed along with interest and imposed penalty of amount equal to duty under Section 11AC of the Central Excise Act. The appellant are engaged in the manufacture of cotton yarn during the period January 1998 to September 2000 and cleared the goods from the depot and are not included the depot expenses to the assessable value of the goods. This fact came to the knowledge of the Revenue when the officials of the Revenue visited the appellant's factory premises and verified the records. Show-cause notice was issued and the adjudicating authority confirmed the demand and imposed penalty.
3. The contention of the appellant is that the fact that the appellant were clearing the goods from the depot was within the knowledge of the Revenue. Therefore, confirmation of demand by invoking the extended period is not sustainable and also relied upon the decision of the Tribunal in the case of Commissioner of Central Excise, Coimbatore vs. Best Cotton Mills 2009 (243) ELT 77. The appellant also submitted that penalty is imposed under Section 11AC of the Central Excise Act but no option to pay 25% was granted if the duty along with interest has been paid within 30 days from the date of determination as provided under Section 11AC of the Act. The appellant also rely upon the judgment of the Hon'ble Gujarat High Court in the case of Commissioner of Central Excise & Customs vs. Harish Silk Mills 2010 (255) ELT 393 (Guj.) and the decision of the Tribunal in the case of Sudhir Gensets Ltd. vs. Commissioner of Central Excise, Vapi 2010 (255) ELT 295.
4. Contention of the Revenue is that in the present case the appellant had not filed any declaration in terms of Rule 173 of the Central Excise Rules declaring their marketing pattern and the appellant has not filed any intimation to the Revenue with reference to the sale of goods from their depot Therefore, this is a clear case of suppression and extended period is rightly invoked.
5. We find that it is settled law that depot expenses was to be added to the assessable value of the goods when the place of removal is depot. The appellant had not filed any marketing pattern or any intimation regarding the sale of goods from the depot. Earlier to this period the appellant were clearing the goods at their factory gate and paying duty. In these circumstances, we find no infirmity in the impugned order whereby the demand was confirmed after invoking the extended period. In respect of the penalty, we find that the Hon'ble Gujarat High Court in the case of CCE vs. Harish Silk Mills (supra) held that if duty amount with interest is not paid in time and even reduced penalty of 25% of duty amount is not paid in time and option is not given to assessee such option should be given to assessee and period of 30 days would commence from the date of giving such option. This decision was followed by the Tribunal in the case of Sudhir Gensets Ltd. vs. CCE (supra) wherein the Tribunal gave an option as provided under Section 11AC of the Act. The Tribunal held as under:
"5. As regards penalty, since we have upheld the Suppression/Mis-declaration on the part of the appellants, penalty under Section 11AC has not been explained and option to pay duty with interest and 25% of duty as penalty within 30 days to get reduction of 75% in the penalty under Section 11AC, has not been given by both the lower authorities. In view of the decision of this Tribunal in the case of M/s. Swati Chemicals Industries & Others vide Order Nos. A/1556-1576/WZB/AHD/ 2009 dated 21-7-2009 [2009 (248) E.L.T. 421 (Tribunal)]; such option can be extended by the Tribunal. Accordingly, we, while confirming the penalty under Section 11AC to 100% of duty demanded, give option to the appellant to deposit full amount of duty, interest and penalty to the extent of 25% of duty deposited in full within 30 days from the date of receipt of the order, penalty shall be equal to duty demanded."
6. In view of the decisions of the Hon'ble Gujarat High Court and the Tribunal we confirm the penalty under Section 11AC of 100% of duty confirmed and give option to the appellant to pay full amount of duty with interest and penalty to the extent of 25% of duty within 30 days from the date of receipt of this order. It is made clear that if the appellant failed to do so within 30 days from the date of receipt of the order penalty shall be equal to duty amount confirmed.
7. Appeal disposed of in the above terms.
(Dictated in Court) (S.K. Gaule) Member (Technical) (S.S. Kang) Vice President */as 5 5