Custom, Excise & Service Tax Tribunal
M/S. Steel Authority Of India ... vs Commissioner Of Central Excise & ... on 3 January, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH: KOLKATA
Appeal No. E/305/2009
(Arising out of Order-in-Original No.07/MP/CoMMR/2009/DENOVO/ dated 11.02.2009 passed by the Commissioner of Central Excise, Ranchi)
M/s. Steel Authority of India Ltd.(SAIL)
Applicant (s)/Appellant (s)
Vs.
Commissioner of Central Excise & Service Tax, Ranchi
Respondent (s)
Appearance:
Ms. Satabdi Chatterjee & Shri Rishi Raju, Advocate for the Appellant (s) Shri S.Mukhopadhyay, Suptd.(AR) for the Respondent (s) CORAM:
Honble Shri P.K.Choudhary, Member (Judicial) Date of Hearing:- 03.01.2018 Date of Pronouncement: 23.02.2018 ORDER NO.FO/75176/2018 Per Shri P.K.Choudhary
1. Briefly stated the facts of the case are that the appellant is engaged in the manufacture of various Iron and Steel items classifiable under different chapters of CETA, 1985. A Show Cause Notice dated 18.09.2001 was issued proposing demand of duty of Rs. 19,60,963.00. The appellant paid duty of Rs. 7,62,637.00 attributable to 286.930 MT in December 2001. By the Adjudication Order dated 24.10.2005 the Commissioner of Central Excise confirmed the demand of duty of Rs. 17,13,848.71 on 711.49 MT along with interest and imposed penalty. By Order No. A-1400/KOL/07 dated 18.07.2007, the Tribunal remanded the matter for verification to the original authority in respect of demand of duty on 266.120 M.T of inputs being actually used for the manufacture of machinery parts and the appellants claim of exemption under Notification No. 67/95. The appellant had not disputed the demand of duty on 445.370 MT on which they have paid duty. The Tribunal set aside the Redemption Fine and penalty with liberty to the original authority to re-determine the same if necessary while passing a fresh Order. In Denovo Adjudication the Learned Commissioner confirmed the demand of duty of Rs. 11,02,178.00 on 445.370 M.T. and dropped the demand of duty of Rs. 6,11,670.00 on 266.120 M.T and also imposed penalty of Rs. 3,50,000.00 under Rule 173Q of the erstwhile Central Excise Rules 1944 and further penalty of Rs. 11,02,178.00 under Section 11AC of the Central Excise Act, 1944. The appellant filed this appeal against imposition of penalties.
2. Heard both sides and perused the records.
3. The Learned Advocate appearing on behalf of the appellants submitted that there was no intention to evade payment of duty and therefore penalty under Section 11AC of the Central Excise Act cannot be imposed. It is submitted that there is no findings by the Adjudicating authority with respect to the intention of the assessee to evade payment of duty. It is also submitted that it is case of interpretation of provisions of law in so far as eligibility of benefit of Exemption Notification No. 65/95. It is also submitted that penalty under Rule 173Q of the erstwhile Rule cannot be imposed without any findings thereon. The Learned Counsel referred to various Case Laws. It is submitted that the appellant had already paid 25% of amount of duty as penalty. I find that the Show Cause Notice proposed demand of duty of Rs. 19,60,963.00 in respect of 711.49 MT of goods cleared without payment of duty for captive consumption. It is seen from the Final Order dated 18.07.2007 of the Tribunal that the appellant had not disputed the demand in respect of 445.370 M.T. and also paid the entire amount of duty of Rs. 11,02,178.00. In Denovo Adjudication the Adjudicating authority dropped the balance portion of the demand holding that the appellant is entitled to avail the exemption Notification. The Adjudicating authority observed as under :-
17. As regards the proposal for imposition of penalty on notice no.2 to 6 under rule 209A/210 of the Central Excise Rules, 1944, their involvement/knowledge regarding the dutiability and the requirement of proper accountantal of the impugned goods cannot be denied as they have been holding senior positions in the production and finance & accounts department. Hence the plea of their defence on the ground of ignorance/inadvertence does not hold good. It is, however, found that these notice being the employees of notice no.1, which is a Public Sector Undertaking, have no personal interest or motive to engage themselves in the activities resulting in the evasion of duty. Accordingly I take a lenient view and do not accept the proposal to impose penalty on notice no.2 to 6.
4. Thus, the contention of the Learned Counsel that the Adjudicating authority had not given any finding in respect of imposition of penalty cannot be sustained. In any event, the appellant had disputed the fact of clearance of the goods without payment of duty in respect of 445.370 M.T. as alleged in the Show Cause Notice. So, the imposition of penalty is warranted. The appellant had already paid 25% of duty as penalty. In my considered view, the goods are cleared without payment of duty, the imposition of penalty under Section 11AC is justified. As such, the imposition of penalty under Rule 173Q is not proper. However, the appellant had already paid penalties of 25% of duty as per proviso to Section 11AC of the Act, 1944. The Learned Counsel cited several case laws which are not applicable in the present case as the appellant cleared the goods without payment of duty.
5. In view of the above discussion, the impugned Order is modified to the extent that the penalty under Rule 173Q of the erstwhile Rule is set aside. The demand of duty and imposition of penalty under Section 11AC is upheld. 6. The appeal filed by the appellant is disposed off in the above terms.
(Pronounced in the open court on 23.02.2018) S/d.
(P.K.Choudhary) MEMBER (JUDICIAL) ss 4 Appeal No. E/305/2009