Custom, Excise & Service Tax Tribunal
M/S Haryana Acrylic Mfg. Co. P.Ltd vs Cce, New Delhi on 28 February, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
ROA No.111 to 113 of 2011
Excise Appeal No. 2648 of 1999
& 2656-2657 of 1999
M/s Haryana Acrylic Mfg. Co. P.Ltd. Appellants
Shri S.P.Singh
Shri S.K.Agarwal
Vs.
CCE, New Delhi Respondent
Coram: Honble Ms. Archana Wadhwa, Judicial Member Honble Mr. Mathew John, Technical Member Appearance:
Shri J.Velapally, Sr. Adv. and Shri P.Ranjan, Adv. for the Appellants Shri R.K.Varma, DR for the Respondent Date of Hearing/decision : 28.02.2012 ORDER NO . ___________DATED________ Per Ms. Archana Wadhwa:
The Misc. Applications stands filed is for recalling of order No.765-767/2011-EX, dtd. 11.08.11 as the same was passed ex-parte after the matter was once passed over at the request of the appellants and subsequently called and decided. The appellants grievance is that Sr. Advocate, Shri J.Velapally was to cause appearance. As the Sr. Advocate was busy before the Honble Supreme Court, the request was made to passover the matter and matter was again called around 12.40 p.m. when the Sr. Advocate was on his way to Tribunal to attend the same. In view of the above, we recall the final order referred (supra) and proceed to decide the issue.
2. After hearing both the sides, it is seen that vide impugned order of the Commissioner(Appeals), demand of duty of Rs.85,73,522/- was confirmed against M/s Haryana Acrylic Mfg. Co.P.Ltd. along with imposition of penalty of identical amount in terms of the provisions of Section 11AC. Tribunal vide its final order No.A-835-837/2000, dtd. 20.09.2000 confirmed the demand of duty against the said appellants. However, taking into account, the overall facts and circumstances of the case, penalty on the company was reduced to Rs.5 lakhs.
3. Against the said order of the Tribunal, a reference application was filed both by the company as well as by the Revenue. Reference application filed by the company stands rejected by the Honble High Court of Punjab & Haryana. Matter was further taken up before the Honble Supreme Court against the dismissal of reference application by Honble High Court and the same was dismissed by the apex court. The consequence of the same is that demand of duty and imposition of penalty of Rs. 5 lakhs stands confirmed against the company.
4. While disposing of reference application filed by the Revenue, Honble High Court of Punjab & Haryana took note of the apex courts decision in the case of Rajasthan Spinning & Weaving Mills reported in 2009(238)ELT3 and remanded the matter to the Tribunal for reconsideration of the penalty amount. For better appreciation the relevant part of the Honble High Court of Punjab & Haryanas decision is reproduced below :-
4. Learned counsel for the petitioner points out that in view of judgement of the Honble Supreme Court in Union of India v. Rajasthan Spinning and Weaving Mills, 2009(238)ELT3 and plain language of Section 11AC of the Act, penalty equal to the amount of duty evaded is mandatory and this question clearly arises from the finding recorded by the Tribunal.
5. We find merit in the submission. However, instead of directing the Tribunal to draw up a statement of case and make a reference to this court, we take the question to have been referred and answer the same in favour of the revenue and against the assessee. Since the effect of judgement relied upon and mandate of the statutory provision has not been gone into by the Tribunal, the order of the Tribunal will require reconsideration. The matter will, thus, stand remanded to the Tribunal for decision in accordance with law. Accordingly, the matter stands remanded to the Tribunal.
5. After hearing both the sides duly represented by Shri J.Velapally, ld. advocate for the appellants and ld. DR Shri Varma for the Revenue, we find that the short issue to be decided is as regards quantum of penalty. Ld. Advocate submits that it is not a case of imposition of penalty in terms of provisions of Section 11AC in as much as the allegations are for irregular availment of Modvat Credit which do not involve any suppression or mis-statement of facts. However, he otherwise fairly agrees that once Section 11AC is held applicable, the quantum of penalty required to be imposed is to the extent of 100% as held by the Honble Supreme Court in the case of Dharmendra Textiles reported in 2008(TIOL)192(SC). He accordingly submits that this being a case of non-imposition of penalty, though the Tribunal in its first order had imposed penalty of Rs.5 lakhs, the enhancement of penalty to the extent of 100% duty confirmed against them is not justified.
6. Countering the argument, ld. DR submits that the law on the issue is no longer res-integra and stands settled by the apex courts decision referred (supra). The Tribunal having held the appellant liable to penalty of Rs.5 lakhs, the only question which survives is as to whether 100% penalty is required to be imposed or the Tribunal has the discretion to reduce the penalty.
7. After carefully considering the submissions made by both the sides, we note that the law on the issue of quantum of penalty stands settled by the apex court. Once the provisions of Section 11AC are held to be invokable against the appellants, the Tribunal has no jurisdiction to reduce the penalty. In the facts of the present case, we find that the Tribunal vide its earlier order dtd. 11.10.2000 has held the appellants liable to penalty in terms of provisions of Section 11AC. The said order of the Tribunal stands confirmed by the Honble High Court and subsequently by the Honble Supreme Court. As such we are not in agreement with the ld. Sr. Advocate that it is not a case of imposition of penalty and the merits of the case should be considered afresh as regards penalty is concerned. We make it clear that being a coordinate Bench of the Tribunal, we cannot sit in appeal the earlier orders of the Tribunal vide which penalty was held to be imposable upon the appellants.
8. Once the provisions of Section 11AC has been held to be applicable in the appellants case, calling for imposition of penalty upon them, such penalty has to be to the extent of 100% of the duty amount. As such by following the apex courts judgement in the case of Rajasthan Spinning & Weaving Mills as also in the case of Dharmendra Textiles, we enhance the penalty equivalent to the duty confirmed against the appellants. The matter is disposed of in above manner.
(Pronounced in the open Court)
(Archana Wadhwa) Member(Judicial)
(Mathew John)
Member(Technical)
RK-I
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