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C.N.B. Nair

1. I have perused the records and have heard both sides.

2. The difference of opinion between the two Members is about the quantum of penalty required to be imposed on the appellant.

3. During the hearing of the case, learned Consultant appearing for the assessee took the through the findings of both the Members and facts disclosed by the records. He pointed out that this was a case of a small portion of the duty remaining unpaid on account of human error in the appellant's organization and not because of any deliberate or intentional attempt to evade payment of duty. He submitted that this fact is clear from the amounts involved themselves. The non-payment of duty occurred during the period between 1989-90 and 1993-94. The amounts of duties unpaid varied from 0.45% to 0.79% of the duty payable. He pointed out that such a small error could not be the result of any thought out strategy to evade duty. He further submitted that the appellants conduct itself would show that there was no intention to evade duty. In support of this submission he has relied on the appellants, letter dated 10.12.93. Under this letter the appellant informed the jurisdictional Supdt., Central Excise that verification of details relating to spare parts during April 1993 to September, 1993 has shown that "due to inadvertence" at the time of clearing of such parts, some parts got cleared without payment of duty. The letter further informed that the appellant had paid Rs. 1,43,614 as duty towards the goods so cleared during the period. Challan evidencing the payment of duty on 30th November, 93 was also submitted to the authorities. The letter further stated that the appellants were carrying out a verification of details for five years prior to 93-94 and would pay the duty if any liability arises. The learned Consultant stressed that the detection of the non-payment of duty was by the appellants themselves and that they had paid the entire duty before the issue of show cause notice in July 94. He submitted that in such a case, no imposition of penalty would have been warranted and in any case not the high penalty imposed by the Commissioner in the adjudication proceedings. The learned Counsel also pointed out that Member (Judicial) had clearly reached a conclusion in his order that there was no mens rea involved in the present case and there was no wilful mis-statement of facts with intent to evade duty. However, he confirmed penalty of Rs. 10 lakhs only on account of the fact that, in the stay order, the Division Bench had ordered the pre-deposit of that amount forwards penalty upon a finding that the appellant was a large scale unit and under the SRP scheme it was their duty to ensure that full compliance with payment of duty took place.