Gujarat High Court
Commissioner vs M/S on 6 April, 2011
Author: Akil Kureshi
Bench: Akil Kureshi
Gujarat High Court Case Information System
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TAXAP/1592/2010 4/ 4 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1592 of 2010
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COMMISSIONER
- Appellant(s)
Versus
M/S
PASHUPATI PRINTS (P) LTD. - Opponent(s)
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Appearance
:
MR
GAURANG H BHATT
for
Appellant
None for
Opponent
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CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 24th March 2011
ORAL
ORDER (Per
: HONOURABLE Ms. JUSTICE SONIA GOKANI) Revenue, in the present Appeal, has proposed following question of law for our consideration :-
[A] "Whether, in the facts and circumstances of the case, the ld. CESTA Tribunal is justified in the eye of law in granting the option to the assessee to deposit the entire dues, interest alongwith 25% of penalty, within the period of thirty days of the communication of its Order dated
02.09.2009, in which case the Penalty shall stand restricted to 25% of the duty amount, in view of the proviso to Section 11 AC of the Central Excise Act, 1944 ?"
[B] "Whether in the facts and circumstances of the case, the ld. Tribunal is justified in the eye of law in observing that where no option granted by the Adjudicating Authority as also the Commissioner [Appeals] to the assessee to deposit 25% of penalty alongwith duty and interest within a period of thirty days from the communication of the order passed by the, such option can be exercised by the appellate authority.?"
[C] "Whether the assessee is entitled in the year 2009 to have the benefit of the proviso to Section 11AC of the said Act, which was very much available and open to the said assessee in the year 2000-2001, though the Order-in-Original dated 24.03.2001 has been confirmed and upheld by the order-in-Appeal dated 21.02.2003, and later on also by the impugned order dated 02.09.2009 ?"
[D] Whether there is any bounden duty under the Central Excise Law cast upon the Adjudicating Authority to explain and/or to state with/ without the note, the provisions of 1st and 2nd proviso to Section 11 AC of the said Act, or to offer any specific option to any assessee or to advise thereof to the assessee so as to avail the same by such assessee, in the Order in Original itself or through any other legitimate manner ?"
[E] "Whether the ld. Tribunal has committed an error in relying upon the decision of CCE v Swathi Chemical Industries & Ors ?
[F] "Whether the penalty imposed under Rule 173 Q (1) of the Central Excise Rules, 1944 read with Section 11 AC could be interefered with, in view of the decision of the Hon'ble Apex Court in the matter of Union of India v. Dharmendra Textiles Processors and Union of India v. Rajasthan Spinning & Weaving Mills ?"
[G] Whether, in the facts and in the circumstances of the case, the ld. Tribunal is justified in the eye of law in setting aside the penalty imposed on Shri Alok Nandkishor Bansal, Director of the Mill under Rule 173 Q (1) and / or Rule 209 A of the Central Excise Rules, 1944 ?"
Assessee-M/s.
Pashupati Prints (P) Limited engaged in the processing of the man-made fabrics was visited by the officers of the Central Excise Department for preventive checks on 16th June 1998. During the said check, certain anomalies in the stock were noticed. For the said excess stock of processed articles, which were not found accounted for in the register, the Department had levied Central Excise duty to the tune of Rs. 53,53,700/= and a show cause notice in that respect was issued. After hearing the authorized representative of the Unit, the Department had levied duty, interest and penalty for the act of contravention of provisions of the Central Excise Act and Rules. Against the said order-in-original, the Commissioner [Appeals] was approached by the assessee, where it confirmed and upheld the order-in-original dated 24th March 2001, quashing the order of confiscation of land. The Unit approached the Customs, Excise & Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad [hereinafter referred to as, "the CESTAT"].
The CESTAT on having found that the duty amount was deposited prior to issuance of the show cause notice dated 2nd December 1998, reduced the penalty to 25% of the duty amount. The Tax Appeals were preferred before the High Court against the said order and the High Court vide its order dated 2nd March 2009 quashed the order of Tribunal dated 9th July 2007 and remanded the same back to the Tribunal in wake of the ratio laid down in the case of Union of India v. Dharmendra Textile Processors, reported in 2008 (231) ELT p-3.
The CESTAT, thereafter in its last order dated 2nd September 2009, has held as follows :-
"2. As per the Hon'ble Supreme Court's judgment in the above referred matter, penalty to the extent of 100% is required to be imposed in terms of Section 11AC of the Central Excise Act. As such by following the above judgment, we enhance the penalty amount of Rs. 11,15,901/= [Rupees eleven lakhs fifteen thousand nine hundred and one only] in case of Pashupati Pvt. Limited.
3. We further no9te that neither the Original Adjudicating Authority nor Commissioner [Appeals] has granted any option to the assessee to deposit 25% of the penalty alongwith duty and interest within a period of thirty days from the communication of the order passed by them. Tribunal in the case of CCE v. Swathi Chemical Industries & Others Order No. A/1556-1576/WZB /AHD/2009 dated 21.07.2009, which stands followed by us in other matters, has examined the issue and has held that where no such option has been given, such an option can be exercised by the appellate authority, in terms of the third and fourth proviso to Section 11AC. As such while enhancing the penalty to 100% of duty amount, we hold that such penalty would come down to 25% of the duty amount, in case the appellant deposit the same within a period of thirty days from the communication of the present order. However, if the said penalty already stands deposited by the appellant, the same would get reduced to the above amount."
That being the position, there is no reason to interfere with the order passed by the Customs, Excise & Service Tax Appellate Tribunal, Ahmedabad dated 2nd September 2009, which is in consonance with the ratio laid down by this Court. Hence, Appeal fails and is dismissed. No costs.
{Akil Kureshi, J.} {Ms. Sonia Gokani, J.} Prakash* Top