Custom, Excise & Service Tax Tribunal
M/S. Motor Industries Co. Ltd vs Cce Nashik on 13 July, 2011
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI
COURT NO. II
APPEAL NO. E/438/04 Mum
(Arising out of Order-in-Appeal No. RK/97/Nashik/2003 dated 31.10.2003 passed by the Commissioner of Central Excise & Customs (Appeals), Nagpur.)
For approval and signature:
Honble Shri S.K. Gaule, Member (Technical)
1. Whether Press Reporters may be allowed to see : No
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether Their Lordships wish to see the fair copy : Yes
of the Order?
4. Whether Order is to be circulated to the Departmental : Yes
authorities?
M/s. Motor Industries Co. Ltd.,
:
Appellant
Versus
CCE Nashik
Respondent
Appearance Shri T.C. Nair, Advocate for Appellant Shri Sanjay Kalra, JDR for Respondents CORAM:
Shri. S.K. Gaule, Member (Technical) Date of Hearing : 13.07.11 Date of Decision : 13.07.11 ORDER NO.
Per S.K. Gaule Heard both sides. The appellant filed this appeal against the order-in-appeal No. RK/97/Nashik/2003 dated 31.10.2003 whereby the Commissioner (Appeals) upheld the order of the lower adjudicating authority.
2. Briefly stated facts of the case are that the appellant is engaged in the manufacture of Forged Links and supplying the same to their plant at Bangalore. The appellant arrived at the value of the goods based on costing certificate which was required to be revised annually. However, they have not revised the prices from 1994-95 onwards. Proceedings were initiated against the appellant on the ground that they have not considered the increase in the material cost, wages and other expenses which, over a period amounted to atleast 40%. The department alleged that they have suppressed the fact by not revising the prices periodically with an intention to evade payment of duty. The lower adjudicating authority has confirmed the duty demand of Rs.3,51,794/- along with interest. A penalty of Rs.43,683/- under Section 11AC was also imposed. The appellant challenged the same. The learned Commissioner (Appeals) upheld the order of lower adjudicating authority, hence the appeal.
3. The contention of the appellant is that whatever duty paid on their Nashik Unit the credit of the same is taken at Bangalore. Therefore, this is a revenue neutral situation and they are not going to gain anything by suppressing the value alleged in the proceedings. So far as the demand of Rs.10,81,815/- is concerned, they are contesting the same. However, they did not contest the confirmation of demand of Rs.3,51,794/- since they were entitled for credit on the same amount and, accordingly they have availed the credit. They did not contest the demand since the situation is revenue neutral and in the revenue neutral situation they are not liable to be imposed penalty. In support of their contention they placed reliance on the Tribunals decision in the case of SRF Ltd. vs. CCE Chennai I 2007 (220) ELT 201 (Tri. Chennai) wherein the penalty against the appellant was set aside in the revenue neutral situation.
4. The learned JDR submitted that the demand in the case raised on the basis of ingredients namely suppression of facts with intention to evade payment of duty. The appellant has not challenged the confirmation of demand raised with ingredients viz. suppression of fact with intention to evade payment of duty itself shows that provision of Section 11AC is applicable irrespective of the revenue neutral situation in term or otherwise. In support of their contention they placed reliance on the decision of the Honble Supreme Court in the case of Union of India vs. Rajasthan Spinning & Weaving Mills 2009 (238) ELT 3 (S.C.).
5. I have carefully considered the submissions made by both sides and perused the records.
6. I find that the penalty under Section 11AC of the Central Excise Act, 1944 has been imposed only for the period when the provision of Section 11AC was in vogue. The demand in the case was raised on the ground of suppression of facts with intention to evade payment of duty for extended period under the provision of Section 11AC. The appellant after 1994 to 1995 did not revise their price list. It is not in dispute that after that they were clearing their goods to their unit at Bangalore. They have not contested the confirmation of demand under provision of Section 11AC. Both Proviso to sub Section (1) of Section 11A of Central Excise Act, 1944 and Section 11AC ibid use the same expressions like fraud, collusion, willful mis-statement, suppression of facts, or contravention of provisions with intent to evade payment of duty and once the conditions that extend normal period of limitation for demand to five years then it would attract imposition of penalty under Section 11AC ibid. The Honble Supreme Court in the case of Rajasthan Spinning & Weaving Mills (supra) held that once Section 11AC is applicable the concerned authority would not have distinguished in quantifying the amount of penalty imposed under sub-Section 2 of Section 11A. So far as Tribunals decision in SRF Ltd. supra cited by the appellant is concerned, the demand of duty itself was not sustainable in the case, therefore, the same is not relevant.
7. In view of the above, I do not find any infirmity with the concurrent findings of the lower appellate authority. The order-in-appeal is upheld and the appeal is dismissed.
(Dictated in Court) (S.K. Gaule) Member (Technical) nsk 4