TaxTMI 
TaxTMI 
2019 (1) TMI 1424
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....(1) of Section 35G of 1944 Act says that "An appeal shall lie to the High Court from every order passed in appeal by the Appellate Tribunal on or after the 1st day of July, 2003 (not being an order relating, among other things, to the determination of any question having a relation to the rate of duty of excise or to the value of goods for the purposes of assessment), if the High Court is satisfied that the case involves a substantial question of law." Be that as it may. The appeal takes an exception to the final order dated 08.10.2003 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, in appeal against an order dated 31.03.2003 passed by the Commissioner (Appeals-II), Customs & Central Excise, Indore. (2) Resp....
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....ty should not be imposed upon them under Rule 57I (4) read with 173Q of the Rules. (iii) Interest should not be recovered on the amount demanded above in terms of Rule 57I (5) read with Section 11AA of the Central Excise Act, 1944 would also become applicable at the appropriate time." (5) On receiving reply, the matter was adjudicated and an order on 16.06.1999 was passed in the following terms: "(i) Modvat Credit of Rs. 30,360/- availed on the fake documents by the noticee No.1 is disallowed and confirm for recovery under Rule 57I (ii) of the Central Excise Rules, readwith Section 11A of the Central Excise Act, 1944. (ii) I impose a penalty of Rs. 30,360/- (Rs. Thirty Thousand Three Hundred Sixty Only) upon th....
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....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 ten thousand rupees, whichever is greater." (10) Thus, a liability to penalty shall arise when a person 'knows' or 'has reason to believe' that the possession of, or transporting, depositing, keeping, concealing, selling or purchasing, or deals in any manner any excisable goods are liable to confiscation. (11) The expression "knows" as per Merriam Webster Dictionary means (1) to perceive directly: have direct cognition of; (2) to be acquainted or familiar with (3) to ....
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....sion or inference about the nature of the thing. These two requirements i.e. "knowledge" and "reason to believe" have to be deduced from various circumstances in the case............" (14) In the case at hand, as evident from the Show-Case Notice that during investigation statement of Shri V.B. Gupta authorized signatory of the noticee was recorded on 01.09.1997 under Section 14 of 1944 Act wherein he deposed that the material under the impugned documents had been purchased through a mediator/MS Scrap broker Shri Praveen Maheshwari and that he had not made any effort to verify the genuineness of the documents and the supplier of goods. The authorized signatory further stated that the supply of goods was on for basis so he did not have an....
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.... "9. ....Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, ......" (17) In "Commissioner of Sales Tax, Uttar Pradesh Vs. Sanjiv Fabrics [(2010) 9 SCC 630]", their Lordships taking into consideration the decisions in "M/s Gujarat Travancore Agency, Cochin Vs. Commissioner of Income Tax, Kerala, Ernakulam [(1989) 3 SCC 52]"; "Union of India and others Vs. Dharmendra Textile Processors and others [(2008) 13 SCC 369]" and "Union of India Vs. Rajasthan Spinning and Weaving Mills [(2009) 13 SCC 448]", formulated the following factors to determin....