Custom, Excise & Service Tax Tribunal
Yes vs Represented By : Shri D.K. Trivedi, ... on 26 November, 2010
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : E/04 of 2010 Arising out of : OIA No. 36 to 238/2009(AHD-I)/CE/RLM Commr(A)/Ahd Dated 30.9.2009. Passed by : Commr. (Appeals) C. Excise & Cus. Ahmedabad For approval and signature : Hon'ble Mrs. Archana Wadhwa, Member (Judicial) 1 Whether Press Reporter 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? No 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 Appellant (s) : M/s. V.K. Engineers Represented by : Shri D.K. Trivedi, Advocate Respondent (s) : Commissioner of Central Excise Ahmedabad
Represented by : Shri S.K. Mall, SDR CORAM :
Hon'ble Mrs. Archana Wadhwa, Member (Judicial) Date of Hearing : 26.11.2010 Date of Decision : _________ ORDER No. _____________ /WZB/AHD/2010 Per : Mrs. Archana Wadhwa;
As per facts on record, proceedings were initiated against M/s. V.K. Engineers for confirmation of duty and imposition of penalty on the ground that they have deliberately and illicitly cleared the goods manufactured by them under the invoice raised by other firm under the name and style of M/s. S.T. Engineers, in order to avail benefit of small scale exemption under the notification 08/2003-CE, with an intention not to exceed the sale proceeds of small scale limitation of Rs. One crore. The said proceedings resulted in passing the order by Assistant Commissioner vide which he has confirmed demand of Rs. 3,42,285/- against M/s. V.K. Engineers and also imposed penalty of Rs. 25,000/- on them under the provisions of Rule 25 of Central Excise Rules. In addition, penalty was also imposed on the other concern i.e. M/s. S.T. Engineers.
2. Being aggrieved with the said order, the Revenue filed an appeal before Commissioner (Appeals) for imposition of penalty under the provisions of Section 11AC. It is seen that the respondents in the present case as also M/s. S.T. Engineers filed appeals before Commissioner (Appeals) which were rejected by him. Inasmuch as no further appeal stands filed by them, I am only concerned with the appeal filed against the impugned order vide which Commissioner (Appeals) has accepted the Revenues stand of imposition of penalty under Section 11AC.
3. We find that duty confirmation stands accepted by the appellants. The original adjudicating authority only imposed penalty under Rule 25 of the Central Excise Rules, 2002 without any imposition of penalty under Section 11AC of Central Excise Act, even though the said Section was invoked in the show cause notice. The Revenue filed an appeal for imposition of penalty under Section 11AC in the light of the law declared by the Hon'ble Supreme Court in the case of UOI vs. Dharmendra Textile Processors reported in 2008-TIOL-192-SC-CXLB .
4. Demand stands confirmed against the appellants by invoking suppression of facts, contravention of rules and deliberate intent to evade payment of duty by resorting to the system of clearance of goods under the name and style of an other concern so as to remain within the small scale exemption limits. The provisions of Section 11AC provide for imposition of penalty where any duty of excise has not been paid on account of fraud, willful mis-statement or suppression of fact or contravention of any provisions of law with intent to evade duty. Inasmuch as duty confirmation which is basically based on the malafide intention of the appellant, does not stands disputed, provisions of section 11AC would get attracted. The Hon'ble Supreme Court in the above mentioned case of UOI vs. Dharmendra Textile Processors has held that, where the provisions of Section 11AC are applicable, authorities have no jurisdiction to impose lesser penalty. As such, I find no infirmity in the view adopted by the Commissioner (Appeals) for imposing penalty equivalent to duty confirmed, in terms of the provisions of Section 11AC. I accordingly, uphold the impugned order.
5. At this stage, learned advocate submitted that penalty under Section 11AC was imposed by Commissioner (Appeals) for the first time without giving any option to them to deposit 25% of the same within 30 days of the receipt of the order, in which case the penalty shall stands reduced to the extent of 25% of the duty amount. For the above proposition he has relied upon the Tribunal decision in the case of M/s. Crystal Glazes vide order No. A/2231/WZB/AHD/2009 dated 30.10.2009. For better appreciation, Para 3 of the same is reproduced :-
3. As per the law laid down by the Hon'ble Apex Court in the case of Union of India v. Dharmendra Textile Processors, 2008 (231) ELT.3, penalty under Section 11AC is mandatory. However, in view of the decision of this Tribunal in the case of M/s. Swati Chemicals Industries & Others being order No. A/1556-1576/WZB/AHD/2009 dt. 21.7.2009 and also the decision of the Hon'ble Gujarat High Court in the case of CCE Ahmedabad vs. M/s. Akash Fashion Prints Pvt. Limited 2009 (93) RLT 471 (Guj.), option can be given to pay duty, interest and penalty to the extent of 25% of the duty, within 30days of receipt of the order of the Tribunal, If the same was not given by the lower authorities. In this case, such option has not been given by the lower authorities. Accordingly, appellants are given option to pay interest and penalty to the extent of 25% of the duty demanded, within 30 days of the communication of this order and if both the elements namely interest and penalty are not paid within 30 days, penalty shall stand enhanced to 100% of the duty amount.
6. By adopting the ratio of the above decision, I give an option to the appellants to deposit 25% of the penalty amount along with duty and interest, within a period of 30 days of receipt of the present order, in which case, the penalty shall stand reduced to 25%.
The appeal is disposed off in the above manner.
(Pronounced in the Court ____________)
(Archana Wadhwa)
Member (Judicial)
..KL
??
??
??
??
4