TaxTMI 
TaxTMI 
2021 (12) TMI 905
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....n order-in-original dated June 16, 2021 (Exhibit 'A') is under challenge in these writ petitions. Although appellate remedy is available to them, the petitioners have invoked the writ jurisdiction of this Court claiming that no appeal under section 35F of the Central Excise Act, 1944 would be entertained by the Appellate Authority, unless the petitioners pre-deposit 7.5% of the penalty imposed by the impugned order. Relying on grounds (A) & (B) of the writ petitions, learned counsel for the petitioners submits that penalty could not have exceeded the due liability of the petitioners (Rs. 43 lakh and odd) and, therefore, to make a pre-deposit @ 7.5% of the imposed penalty (in excess of Rs. 1 crore), apart from being an onerous condition for the petitioners to satisfy to have its appeal entertained by the Appellate Authority, such imposition is without jurisdiction. 2. We call upon the respondents to file a short reply to oppose the prayers of the petitioners for admission of the writ petitions and grant of interim relief. Such affidavits be filed by September 21, 2021; rejoinder thereto, if any, may be filed by 5 days thereafter. 3. List the writ petitions on Septe....
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....ct' for short), Rules 4, 6 and 8 of the Central Excise Rules, 2002 (hereinafter referred to as 'the Rules' for short) and Rule 10A of the Valuation Rules with an intent to evade excise duty and that Mr. Raju Mathew (Managing Director, MEPL) colluded with the petitioners and Danieli India Limited, a show cause notice dated August 3, 2017 came to be issued for the period July 2012 and March 2017, on the petitioners and Danieli India Limited under Section 11A (4) for duty demand under the said Act, confiscation under Rule 25 (1) of the Rules, imposition of the penalty under Section 11AA of the said Act read with Rule 25 and 27 of the Rules read with Rule 15 of the Cenvat Credit Rules, 2002 and penalty under Rule 26 of the Rules. 6. The petitioners replied to the show cause notice vide letters dated January 15, 2018 and attended personal hearings before the respondent no.3, Adjudicating Authority on January 16, 2018, February 15, 2021 and May 19, 2021. By an Order-in-Original dated June 16, 2021, the respondent no.3 confirmed the duty demand, ordered confiscation, also imposed penalty and interest. The gist of the operative order is thus: "A. Confirmed duty demand Rs. 1,53,....
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....earned counsel for the petitioners is on Rule 26 of the Rules 2002 stipulating the quantum of penalty as not exceeding the duty liability. 9. It is the petitioners' case that they have supplied goods having duty liability of Rs. 45,29,528/-, despite which the impugned order imposed penalty on petitioners exceeding the maximum limit stipulated under Rule 26 of the Rules 2002. Learned counsel for the petitioners was at pains to point out that the respondent no.3 should have restricted itself to the extent of the duty amount of Rs. 45,29,528/- instead of imposition of penalty amount of Rs. 1,53,03,329/-, which according to him is unwarranted in law and beyond jurisdiction. 10. Apart from the preliminary objection, learned counsel for the respondents, on the other hand, invited our attention to the detailed findings recorded by the respondent no.3 to support his submissions that the petitioners want this Court in the exercise of its jurisdiction under Article 226 of the Constitution of India to embark upon a fact finding exercise, which is not permissible. 11. Heard learned counsel for the parties. We have perused the petitions, the annexures, the impugned Order-in- Original a....
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....d of the petitioners that there is a grave error in quantification of the demand for duty from MEPL. Relying on Annexure-'A' attached to the show cause notice, at Serial No.40 (page 145 of the writ petitions), it is the petitioners' case that the corresponding invoice value is taken as Rs. 3,06,75,000/- instead of Rs. 30,67,500/-. It is the petitioners stand that the value on which MEPL had paid duty was Rs. 14,84,959/-, thus, the differential duty demandable was Rs. 15,82,541/- whereas the department has demanded duty of Rs. 2,91,90,041/-. In our opinion, the petitioners are attempting to bring to our notice factual errors in the impugned order. For us to accept the petitioners' contention that they supplied goods having duty liability of Rs. 45,29,528/-, essentially entails a fact finding exercise. There is nothing on record to indicate that the duty liability of Rs. 45,29,528/- claimed by the petitioners is accepted by the respondents. The petitioners proceed on the footing that the petitioners supplied goods having duty liability as claimed by them and therefore, penalty is excessive. To arrive at the conclusion that the petitioners supplied goods having the duty liability as c....
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.... 7.5% pre-deposit of the penalty demanded cannot be said to be exorbitant or onerous, more so when it is well settled that when a statute confers a right of appeal, while granting the right, the legislature can impose conditions for the exercise of such right, so long as the conditions are not so onerous as to amount to unreasonable restrictions. 18. The Division Bench of this Court in Kim Steel Strips Pvt. Ltd. & anr. vs. The Commissioner of Central Excise and Customs, Belapur Commissionerate Writ Petition No.5654 of 2017, judgment dtd.3/8/2017., while considering the provisions regarding mandatory pre-deposit before filing the appeal under the said Act, in paragraph 9 held thus: "9. A plain reading of this provision makes it clear that the deposit of certain percentage of duty or penalty is a prerequisite for filing the appeal. The provision does not confer any powers on the appellate authority to waive or reduce the mandatory pre-requisite. Furthermore, the amounts which is required to be deposited, is 7.5% per cent of the duty demanded or fine imposed, which cannot stated to be exorbitant. The decision of the Apex Court in Government of Andhra Pradesh & Ors. V. Smt.....