TaxTMI 
TaxTMI 
2013 (6) TMI 35
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....e finished goods i.e. sanitary and bath fittings as well as packing material were found bearing the brand name 'Guru', which was owned by M/s United Cocks Pvt. Ltd., A122 Shardapuri, Ramesh Nagar, New Delhi. The visiting officers seized the goods valued at Rs.5,89,273/- on the belief that the goods bearing 'Guru' brand name lying finished in the store are intended to be cleared without payment of duty and are liable for confiscation. The stand of the assessee was that the brand name 'Guru' has been purchased by the assessee from M/s United Cocks Pvt. Ltd. on the basis of Memorandum of Understanding dated 02.04.2001 and Assignment Deed dated 01.04.2003. The said firm was engaged in the manufacture of sanitary and bath fittings till February, 2001, when they have to close their production activities due to reallocation scheme by the Delhi Government after the Central Excise Registration was surrendered. The Adjudicating Authority found that the goods cleared with brand name 'Guru' prior to 02.04.2001 i.e. prior to arriving at Memorandum of Understanding, the assessee was not eligible for SSI exemption and, thus, confirmed the demand of Rs.3,46,148/-. The Adjudicating Authority als....
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....ibunal also returned a finding that interest would be payable only from 11.05.2001, the date when Section 11AB was inserted. Aggrieved against the said order, the Revenue is in appeal. Learned counsel for the assessee has raised a preliminary objection that an appeal under Section 35G of the Act is not maintainable before this Court, as the order impugned is an order determining question in relation to rate of duty of excise or to the value of goods for the purposes of assessment and, therefore, in terms of Section 35G of the Act, an appeal against such an order of the Tribunal lies only before the Hon'ble Supreme Court. In support of such contention reliance was placed upon the judgment of Hon'ble Supreme Court in Navin Chemicals Manufacturing & Trading Co. Ltd. Vs. Collector of Customs 1993 (68) ELT 3 as well as on the judgment of Bombay High Court in Commissioner of Customs & Central Excise, Goa Vs. Primella Sanitary Products (P) Ltd. 2002 (145) ELT 515. It is also contended that the assessee has filed an appeal before the Hon'ble Supreme Court aggrieved against the duty demanded and that such appeal has since been dismissed on 13.12.2010, therefore, the order of the Tribunal....
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....oned, the questions in issue, relating to the rates of duty or the value of goods were for the purposes of assessment, have relevance not only for the parties there concerned, but for other importers as well." The issue in the present lis is regarding benefit of exemption under Notification No.8/2001 available to an assessee, a Small Scale Industry. It is not an issue relating to rates of duty or the value of goods, but only to the effect whether the assessee is entitled to exemption granted to a Small Scale Industrial Unit on the basis of trade mark of another concern. Any decision thereon, is relevant only inter-parties and has no wider ramification within the jurisdiction of this Court much less in the Country. Therefore, such localized dispute does not fall within the exception of Section 35G of the Act. Thus, this Court will have jurisdiction to entertain the appeal in respect of clandestine removal of goods claiming benefit of exemption as per Notification No.8/2001. Thus, the first question of law is answered holding that claim of the benefit of a notification by an assessee does not give rise to an issue relating to 'rate of duty' or the 'value of goods' for the purposes....
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....d to the following effect: "4. It is evident from the facts noticed above that the principle of merger has no applicability. The appeal of the Revenue was restricted to the reduction of the penalty amount by the Commissioner (Appeals). In the appeal of the appellant, the challenge was not only to the penalty but to the entire order including the order of the Commissioner confirming the demand and holding that the freight expenses of the appellant's factory to the buyer's factory are includible in the assessable value. The restricted question which was the subject matter of the appeal of the Revenue, under these circumstances, cannot result in the dismissal of the appellant's appeal by application of the principle of merger. The said principle on the factual situation herein has no applicability whatsoever. Mr. Raval, the learned Additional Solicitor General very rightly did not support the order on the ground of the applicability of the principle of merger." Similar issue arose subsequently in another judgment reported as Commissioner of Central Excise, Delhi Vs. Pearl Drinks Limited (2010) 11 SCC 153. The Supreme Court held that the doctrine of merger would have no applicati....
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.... has lost in part can by getting his appeal dismissed claim that the opposite party who may be aggrieved of another part of the very same order cannot assail its correctness no matter the appeal earlier disposed of by the Court or authority had not examined the correctness of that part of the order." In view of the ratio of the above-stated judgments, the order dated 13.12.2010, as reproduced above, dismissing Civil Appeal leads to merger of that part of the order alone, which was against the assessee. Once the assessee has availed the remedy of appeal and such appeal has been dismissed, the findings of the Tribunal, which are against the assessee, stands affirmed and stood merged with the order of the Hon'ble Supreme Court. It is more so, when the appeal was dismissed without notice to the Revenue and the Revenue had no opportunity to point that it intends to file an appeal against an order of the Tribunal. Therefore, the findings against the Revenue could be disputed before the competent Court of law. In view of the above, we hold that the doctrine of merger would be applicable only in respect of findings, which were disputed by the assessee before the Hon'ble Supreme Court....
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....Central Excise Officer, following the principles of natural justice. 26. Penalty for certain offences - (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods or two thousand rupees, whichever is greater. (2) Any person, who issues - (i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or (ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of CENVAT credit under the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater." Learned counsel for the Revenue argued that the penalty under Rule 25 of the Rules was imposed not only in respect....
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....at they erred, no case for imposing penalty was made out." The Supreme Court in a judgment reported as Grauer & Weil (India) Ltd. Vs. CCE (1995) 1 SCC 77 relied upon its earlier judgment in Hindustan Steel Ltd.(supra). In Director of Enforcement Vs. M.C.T.M. Corporation (P) Ltd. (1996) 2 SCC 471, the Supreme Court observed that expression 'penalty' is a word of wide significance. Sometimes, it means recovery of an amount as a penal measure even in civil proceedings. An exaction which is not compensatory in character is also termed as a 'penalty'. When penalty is imposed by an adjudicating officer, it is done so in 'adjudicatory proceedings' and not by way of fine as a result of 'prosecution' of an 'accused' for commission of an 'offence' in a criminal court. In Union of India Vs. Dharamendra Textile Processors (2008) 13 SCC 369, the Larger Bench of the Supreme Court approved the judgment in Chairman, SEBI Vs. Shriram Mutual Fund (2006) 5 SCC 361 and held that the penalty under Section 271(1)(c) of the Income Tax Act is a civil liability and willful concealment is not an essential ingredient for attracting civil liability, as is the case in the matter of prosecution under S....
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....o determined: * * * Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty as reduced or increased, as the case may be, shall be taken into account:" (emphasis supplied) 21. From a perusal of the aforesaid section, especially the underlined portion, it is clear that in order to attract the penalty provision under Section 11-AC, criminal intent or "mens rea" is a necessary constituent. In the reply to the show-cause notice the stand which has been taken by the respondent is that it has been paying the duty and there is no mala fide intention on its part to evade the payment of duty. The further stand is that the goods were cleared from the factory only on payment of duty. This stand which has been taken in the reply to the show-cause notices was not found to be incorrect in the order-in-original. As such the imposition of penalty of the equal amount of duty under the order-inoriginal cannot be sustained. 22. It is well settled that when the statutes create an offence and an ingredient of the offence is a delibe....