Custom, Excise & Service Tax Tribunal
Safex Fire Service Ltd. vs Cce Thane Ii on 6 September, 2018
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IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
WEST ZONAL BENCH AT MUMBAI
COURT NO. I
Appeal No. E/1274 to 1307/2010
(Arising out of Order-in-Appeal No. SB/79 to 114/Th-II/2010
dated 19.04.2010 passed by the Commissioner of Central Excise
(Appeals), Mumbai-I).
M/s Safex Fire Services Ltd. Appellant
Vs.
Commissioner of Central Excise, Thane-I Respondent
Appearance:
Shri T.C. Nair, Advocate for Appellant Shri Deepak S. Chavan, Supdt. (AR) for Respondent CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)
HON'BLE MR. S. SRIVASTAVA, MEMBER (TECHNICAL) Date of Hearing: 06.09.2018 Date of Decision: 06.09.2018 ORDER NO. A/87371-87404/2018 Per: Dr. D.M. Misra These appeals are filed against Order-in-Appeal No. SB/79 to 114/Th-II/2010 dated 19.04.2010 passed by the Commissioner of Central Excise (Appeals), Mumbai-I.
2. Briefly stated facts of the case are that the appellants are engaged in the manufacture of 'Fire extinguisher and parts thereof'. These goods are sold at their factory as well as cleared to their depots, on stock transfer basis, after payment of 2 appropriate Central Excise duty. The goods were later sold from the depot at a higher price. Alleging that appropriate duty was not paid by determining the correct assessable value for the goods cleared to depot and sold thereafter, demand notices were issued from time to time demanding differential duty for the period from 2004-05 to December, 2008. On adjudication, the demands were confirmed with interest and penalty. Aggrieved by the said orders, the appellant preferred appeals before the learned Commissioner (Appeals), who in turn, upheld the confirmation of total demand of Rs.16,72,294/- with interest and equal amount of penalty. Hence, the present appeals.
3. At the outset, learned Advocate Shri T.C. Nair for the appellant submits that the appellant had sold/cleared manufactured goods from their factory directly to the customers and a part of said manufactured goods after clearing to the depot, were sold from there. In determining the assessable value of the goods cleared to depot, instead of applying Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000, they have discharged duty on the transaction value of similar goods directly sold from the factory. Learned Advocate submits that in the present appeals, they do not dispute the liability of differential duty arose due to incorrect determination of assessable value of stock transferred goods to depot, however, they dispute the imposition of penalty of equivalent to the differential duty. He submits that there has been no suppression of facts and hence penalty of equivalent amount imposed in case of differential duty demanded and confirmed for the period 2004- 05 and December, 2007 invoking the extended period of limitation, is unsustainable in law. Further, he submits that in 3 all other cases, the show-cause notices were issued periodically, demanding the differential duty, hence imposition of penalty equal to the differential duty, also cannot be sustained.
4. Learned AR for the Revenue reiterates the findings of the learned Commissioner (Appeals). He submits that after applying Rule 7 of the Central Excise Valuation Rules, 2000, the learned Commissioner (Appeals) has upheld the demand of Rs.16,72,294/- and also the penalty. He submits that since data relating to clearance from the factory to depot were not submitted in time, therefore, show-cause notices were issued invoking extended period of limitation in case of demands pertaining to the period 2004-05 and December, 2007. It is his contention that in the above facts and circumstances, imposition of penalty equal to the amount of duty is justified. Since they continued to discharge at the lower value in spite of the direction of the department, therefore, imposition of penalty for the normal period also sustaianable.
5. Heard both sides and perused the records.
6. There is no dispute of the fact that the appellant had cleared manufactured excisable goods, namely, fire extinguishers and parts thereof to their depots, discharging excise duty on the transaction value of the goods sold at the factory gate. Later, the goods were sold from the depots at higher price, without discharging the differential duty. The appellants do not dispute the fact that at the time of goods transferred from the factory to the depot, duty was required to be paid by determining the assessable value adopting Rule 7 of the Central Excise Valuation 4 Rules, 2000. But, their grievance is that penalty equivalent to the differential duty cannot be imposed as they have discharged duty on the goods cleared from the factory to the depot. We find that as far as confirmation of demands invoking extended period of limitation are concerned, both the authorities below are right in their approach inasmuch as the fact of sale of the excisable goods at a higher price from the depots was not communicated to the department nor the related data was submitted to the department from time to time along with their liability to discharge the differential duty. Thus, in our view imposition of penalty equivalent to duty in case of demand relating to the period 2004-05 amounting to Rs.4,56,454/- and for the period December, 2007 amounting to Rs.49,150/- and Rs.21,692/- are concerned, penalty imposed under Section 11AC of the Central Excise Act, 1944 is upheld; however, the appellants are eligible to discharge 25% of the penalty on such amount, on fulfillment of the conditions laid down under the said provisions.
7. In case of demand confirmed against notices issued periodically for normal period, we are of the opinion that a consolidated penalty of Rs.1.00 lakh would meet the ends of justice. The impugned order is modified to the above extent and appeals are allowed partly to the extent mentioned as above. Appeals disposed of.
(Operative portion of the order pronounced in Court) (S. Srivastava) (Dr. D.M. Misra) Member (Technical) Member (Judicial) Sinha 5