AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 3
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....g machineries belonging to M/s. CMS. (ii) M/s. MOC did not have any knowledge of the nature of the said goods and that they had not obtained any permission from their jurisdictional Excise authorities to receive and store the same in their premises. (iii) M/s. CMS used to clear such machineries and parts to M/s. MOC under delivery challans of the former without payment of duty. (iv) The machineries and parts were received for storage purposes. The goods were to be sent back to M/s. CMS whenever required by them under delivery challans with endorsement "stored goods returned as per the letter reference" 2.2 It appeared that the impugned goods had been cleared without payment of duty from the premises of M/s. CMS. The said goods were placed under seizure on 10.06.1992. 2.3 In the statements dated 10.03.1992 and 10.06.1992, Shri. S. Thiagarajan, Cost Accountant of M/s. CMS, inter alia stated that : (a) Due to shortage of space at M/s. CMS, machineries/parts had been sent to M/s. MOC. They had also sent certain old machineries received by them for repair/re-conditioning; (b) Most of the machineries detained at M/s. MOC were fully finished and some of them required only mino....
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....he above demand, confiscated the seized goods; however, gave an option to redeem the said goods on payment of fine of Rs. 1.5 Lakhs in lieu of confiscation and ordered enforcement of Bank Guarantee to the extent of Rs. 12 Lakhs. Other seized goods valued at Rs. 3,09,958/- were held not liable for confiscation. Penalty of Rs. 3 Lakhs was imposed on M/s. CMS under Rule 173Q ibid and penalty of Rs. 30,000/- was imposed on M/s. MOC under Rule 209A ibid. 5.1 In appeal, the Tribunal vide Final Order No. 1452/2000 dated 16.10.2000 set aside the order under appeal and remanded the matter back to the Original Authority for de novo adjudication with certain directions. In de novo adjudication, the Commissioner of Central Excise vide the impugned Order No. 18/2011 dated 29.07.2011 found that in terms of the Tribunal Final Order dated 16.10.2000, the issue before him was to decide : (a) Whether the goods which were held to be excisable are indeed excisable or not in the light of the submissions made by M/s. CMS; and (b) To determine the conduct on the part of M/s. CMS as to whether any mala fide existed. 5.2 The adjudicating authority inter alia held that removal of the goods in dispute ....
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....der-in-Original holds that the impugned goods were liable for confiscation on the only ground that M/s. CMS has cleared the goods for storage without the express permission of the Department. This finding is contrary to the remand direction of the Tribunal. (iv) It is not disputed that the appellant clears the machineries only to their sister units. The excise duty paid by M/s. CMS would be available as MODVAT Credit in the hands of the sister units. This being the case, M/s. CMS achieves no benefit by suppressing the fact of clearances with intention to evade payment of excise duty. Thus, the entire exercise is revenue neutral and therefore, mala fide intention cannot be alleged on the assessee. It is a settled position that mala fide intention cannot be attributed to the assessee in a revenue neutral situation. Reliance is placed on the following decisions : a. M/s. Nirlon Ltd. Vs. C.C.E. - 2015 (320) E.L.T. 22 (S.C.); b. C.C.E. Vs. M/s. Tenneco RC India (P) Ltd. - 2015 (323) E.L.T. 299 (Mad.) (v) It follows that the impugned Order-in-Original holding that the impugned goods are liable for confiscation is not sustainable and penalty is not imposable. (vi) The impugned g....
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....ter ten years from the remand direction of the Tribunal. The dispute was not taken up for adjudication inspite of repeated letters by M/s. CMS requesting the Department to take up the adjudication. It is a settled legal position that inordinate delay in adjudication is fatal to the demand and therefore, demand cannot sustain. Reliance is placed on the following: a. M/s. Lavin Synthetic (P) Ltd. Vs. C.C.E. - 2015 (322) E.L.T. 429 (Bom.); b. M/s. Shirish Harshavardhan Shah Vs. Deputy Director - 2010 (254) E.L.T. 259 (Bom.) (xi) The impugned Order-in-Original imposes penalty of Rs. 30,000/- on M/s. MOC (Guindy unit) without stating any reason for the same. Thus, the penalty merits to be set aside on this ground only. (xii) Further, it is a settled legal position that penalty under Rule 209A of the Central Excise Rules cannot be imposed on company. Reliance is placed on the Larger Bench decision of the Tribunal in M/s. Steel Tubes of India Ltd. Vs. Commissioner of C.Ex., Indore reported in 2007 (217) E.L.T. 506 (Tri. - LB) 7.1 On the other hand, on behalf of the Department, Ld. AR Shri. B. Balamurugan supported the impugned order. He drew our attention to paragraph 3.26 of the....
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....ority for storing the non-duty paid machines nor any entry in the gate pass, yet the fact remains with the amendment of Rule 47 of the Central Excise Rules with effect from 10.05.1989. The Central Board of Excise & Customs, in exceptional circumstances having regard to the shortage of storage space at the premises of manufacturer where the goods are made, permit such a manufacturer to store his goods in any other space outside such premises without payment of duty. No such permission of CBEC has been obtained or produced but this enabling clause of amendment of 1989 indicates that when there is a shortage of space, it is cause enough to permit the storage outside and such permission being procedural should not visit the appellant with a heavy liability of confiscation on such goods. (b) We also find that, in the facts of this case, a majority part of the goods on which duty of Rs. 15,12,454/- determined were subsequent to provisional release cleared on payment of duty of Rs. 16,42,425/- and therefore, we cannot come to any conclusion that there was any intent to evade payment of duty and if there has been any contravention of Rule 173Q it would be only contravention of Rule 173Q(....
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....uments to re-determine whether there was any mala fide intention on the part of the appellants to have violated the procedure. The Tribunal further made it clear that penalty cannot be imposed for a mere technical lapse or breach of Rule 173Q(1)(a). 9.3.3 No doubt, the adjudicating authority has taken note of the CESTAT remand directions to allow the appellants to submit all materials to prove "how the goods which have been held to be excisable were not excisable were not excisable when they were removed from the premises of Tiruvatriiyur to Guindy premises...". However, in response, the adjudicating authority has concluded in paragraph 3.14 of the impugned order that : "...what is required to be seen is whether the goods are capable of being marketed. It is not necessary that the goods have to be actually marketed and it is enough if the goods are capable of being marketed." Even this goalpost of "excisability" arrived at by the adjudicating authority has been subsequently changed by the adjudicating authority in paragraph 3.17, as under : "As long as a goods is a result of manufacturing process and have mobility and marketability and find place in the schedule to the Centra....
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....". He further notes that the act of removal of parts from M/s. CMS's factory "made them ineligible for the exemption under Notification No. 217/86 as amended..." 10. In the event, we find that the impugned order is only a rehash of the earlier adjudication order No. 37/1993 dated 15.11.1993. There has been no attempt to seriously apply the observations, findings and directions of the Tribunal in the remand order dated 16.10.2000. 11.1 As succinctly observed by the Tribunal in the earlier Final Order dated 16.10.2000, the issue of removing the goods from M/s. CMS to M/s. MOC was only due to the constraint of space and size of the machines which were partly assembled. For this reason, the ground plan of their sister unit viz., M/s. MOC was got amended with endorsement by the jurisdictional Range Superintendent: "Approved portion marked 'A' for storing machineries". There is no allegation that the same machineries were being manufactured by M/s. MOC. It therefore will only appear to reason that the said amendment was caused about only for the purpose of storing, in M/s. MOC, such items removed from M/s. CMS due to constraint of space. 11.2 No doubt, this is surely not the proper pr....