TaxTMI 
TaxTMI 
2024 (3) TMI 636
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....the penalty of Rs.8,26,886/- imposed upon appellant-1 under section 11AC (iv) I, also uphold the penalty of Rs.1,00,000/- each on the appellant-2 & the appellant-3, respectively (v) I, hereby, drop the penalty of Rs.1,00,000/- imposed upon the appellant-1 under Rule 173 Q of the erstwhile Central Excise Rules, 1944" 1.2 Original authority has by the order in original No 22/ADC/NOIDA/2011-12 dated 30.12.2011 held as follows: "ORDER (1) I, hereby , confirm demand of Central Excise duty amounting to Rs. 8,26,886/- under the proviso to Section 11A of the Central Excise Act, 1944 and drop the rest of demand i.e Rs 20,52,735/-; (2) I, order appropriation of Rs.59,360/- which has been paid by SIPL vide TR-6 Challan No. 20 dt. 13.09.01 (3) I confirm the demand of interest on the confirmed dues at appropriate rates in terms of Section 11 AB of the Central Excise Act, 1944. (4) I, hereby, impose penalty of 8,26,886/- on M/s. SIPL under Section 11AC of the Central Excise Act, 1944. (5) I, also impose a penalty of Rs. 1,00,000/- on M/s. SIPL under Rule 173Q of the erstwhile Central Excise Rules, 1944 (6) I, hereby, impo....
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.... was imposed on the Appellant 2 and Appellant 3. 2.4 Aggrieved appellants preferred an appeal to the Commissioner (Appeal), who vide his order in appeal no 38-40/Central Excise/APPL/NOIDA/08 dated 25.02.2008, remanded the matter back to original authority for de novo adjudication. 2.5 Original authority vide the order in original referred in para 1 again adjudicated the case. Aggrieved appellant filed the appeal before Commissioner (Appeal) who has vide the impugned order referred in para 1 disposed of the appeals filed by the appellants. 2.6 Aggrieved appellant have filed these appeals. 3.1 I have heard Shri Navin Mullick Advocate for the appellant and Shri Manish Raj Authorized Representative for the revenue. 3.2 Arguing for the appellant learned counsel submits that: Demand of Rs 1,06,687.52/- in respect of central excise invoice no. 16 and 18, both dated 20.04.2001 is based on presumptions and surmises and cannot be sustained. Demand of Rs 90,720/- relating to the clearances to M/s Sita Resorts - is made on the basis of proforma invoices and the statement of their excise in charge Sh D L Soni. In fact appellant had paid the excise duty in respec....
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..../S Continental Furnishers under Rule 209A is liable to be set aside. Reliance is placed on the decision in case of Ballarpur Industries Ltd, [2007 (215) ELT 489(SC)]. 3.3 Arguing for the revenue learned authorized representative reiterates the findings recorded in the impugned order. 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Impugned order records following findings: "4.1 I have carefully gone through the facts and evidence on record and the submissions made by the appellants in the grounds of appeals as well as submissions put forth by the respondent department during the course of personal hearing 4.2 The issues involved in the case are (i) whether duty confirmed by the adjudicating authority is justified (ii) whether imposition of penalty on all the appellants is justified and (iii) whether appropriation of duty already deposited is justified 4.3 Regarding the confirmation of demand of Rs. 1, 06, 687.52, it is observed that the appellant-1 have submitted that the figure in the respective Central Excise Invoices No 16 & 18, both dated 20.04.2001 were erroneously wr....
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....4,39,500/-. There is also no whisper as to how and on what basis the value has been calculated and worked out in the panchnama. On perusal of the panchnama, I observe that value of goods found in the factory / office/ showroom/canteen of the appellant is mentioned in the annexure-B of the panchnama and same was duly signed by the representative of the appellant. The said figure of the panchnama was never retracted by the appellant. Hence I do not find any merit in the contention of the appellant in this regard and I uphold the confirmation of duty amounting to Rs. 70,320/- 4.6 The demand of Rs 5,59,158.48 has been raised on the ground that the appellant-1 has wrongly availed SSI exemption under Notification No. 8/99 dt. 28.02.99 during 2001-02. As per the Show Cause Notice, it was alleged that the appellant-1 had removed excisable goods valued at Rs.4,98, 20,925/-during the year 2000-01, and hence, in terms of condition No. (vi) of the said notification, exemption was not available to them in the subsequent financial year i.e. 2001-02. As per the said condition, the SSI exemption was available in a financial year only if the aggregate value of clearances does not exceed Rs....
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....llant-1 evaded payment of duty. The offence of evasion committed by them is not diluted because the fact of evasion had been reflected in the RT-12 returns filed by them". I also fully agree with case laws relied upon in this regard by the adjudicating authority Thus, I uphold the confirmation of duty amounting to Rs. 5, 59,158.49 4.7 Regarding appropriation of duty already deposited, I observe that duty deposited by the appellant-1 was liable to be adjusted against the demand of duty confirmed against the appellant-1. Accordingly I uphold the appropriation of duty of Rs. 59,360/ which shall be adjusted against the demand of duty confirmed against the appellant -1 4.8 Regarding imposition of penalty, I find that the appellant-1 has evaded payment of duty by clandestinely removing the excisable goods manufactured by them. On the basis of the facts and circumstances, as discussed in the foregoing paras, I also hold that they have rendered themselves liable to penalty under rule 173 Q of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944. However I find no justification in the imposition of separate penalty under Rule 173 Q of the e....
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....ty upon the appellant-3 under rule 209A of the Central Excise Rules, 1944. 4.3 Original authority has recorded following findings in the order in original for confirming the demand against the Appellant 1 and for imposing the penalties on all the three Appellants. Annexure C-3 : Duty Demand -Rs. 5,00,641.52/-: Period 2.9.2000 to April 2001. Clearances effected without payment of duty. 13.1 ....... 13.3 .... S.No 3 of Annexure-C-3 is concerned, I observe that SIPL have not explained the circumstances as to how the figure was shown as 10 & 5 in the invoice No. 16 & 18 (both dt. 20.04.01). for the figure 44 nos. They have also not satisfactorily explained as to how the same is in order as far as return for the quarter ending June‟01 is concerned. Therefore 1 hold that the allegation based on material evidence sustain in the absence of any counter evidence having been produce and thus the demand of Rs. 1,06,687.52 is justified in this case. With regard to the demand made against S.No.4, I find that the same is based on the basis of the statement of Shri D.L Soni and the proforma invoice (Annexure A-5 ). I observe that the statement of Shri Soni has n....
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.... them. I find that they have not contested the case on merits. Therefore, it can be said that there is no dispute about the fact that the value of clearances effected during 2000-01 exceeded Rupees three crores. There is also no dispute about the fact that SIPL were very well aware that they were not eligible for SSI exemption during 2001-02 for the aforesaid reason. The only dispute is whether, the Central Excise duty which had not been paid by wrongly availing the SSI exemption, is recoverable from them by invoking extended period or not. As to this dispute, I am of the considered view that extended period can be invoked for demand of duty in all cases where any of the ingredients specified Under the proviso to Section 11A(1)of Central Excise Act, 1944 is present. In my view., if any of such ingredients is present in a case, then the action for recovery of the duty short paid/ not paid can be taken within 5 years of the relevant date irrespective of the fact as to when the fact of short payment/ non payment of duty comes in the notice of the Department. This is so because nowhere has it been required to take action for recovery of the duty evaded immediately after the evasion com....
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....ot dilute the limitation already available to the Department in view of the clearance of the goods suppressed fact. Having considered the on submissions of the both sides,the Hon‟ble Tribunal did not accept the contention made on behalf of the party and made the following observations: "In other words, if there is any suppression of fact at the time of clearances of the goods and duty has been short paid on account of such a suppression by an assessee the Department can demand the duty so short levied or short paid within a period of five years from the date of payment i.e the date of clearances of such goods" (emphasis supplied) 14.4 The Hon‟ble Tribunal also made the following further observations: ".......it is very clear that at the time of clearances of goods they had suppressed the fact of charging higher duty from the customers while the invoices were made. The subsequent knowledge gathered by the Department from their bills as per the aforesaid correspondences would not confiscate the limitation of five years available to the Department in terms of the plain reading of Section 11A of the Central Excise and Salt Act, 1944. It may be mentioned th....
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....brought on record any evidence- whether documentary or circumstantial- to show that the omissions and commissions made by them in this case have taken place under bona fide belief and that they had no intent to evade payment of duty. 14.9 In view of the discussion and findings, as aforesaid, I hold that they had wrongly availed SSI exemption and thereby evaded payment of Central Excise duty amounting to Rs.5,59,158.49 and the same is recoverable from them under the proviso to Section 11A (1) of Central Excise Act, 1944 by invoking extended period of limitation. 15.1 The facts and circumstances, as discussed in the foregoing paras show that SIPL have contravened, with intent to evade payment of duty, the following rules of Central Excise Rules,1944; (i) Rule 9(1) & 173 G inasmuch as they had removed excisable goods without payment of proper duty leviable thereon; (ii) Rule 52A inasmuch as they did not incorporate the proper and correct details of the goods in the invoices issued by them; (iii) Rule 53 inasmuch as they did not maintain RG-1 register properly; (iv) Rule 173 B inasmuch as they did not declare and disclose proper and....
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....e i.e. Continental have submitted that they had been purchasing the goods on the strength of a regular invoice and that it is wrong to allege that they assisted and abetted in evasion of duty by SIPL. I observe that for imposition of penalty under rule 209A, what is required is that the person/entity on which penalty is proposed is found to have dealt with the goods which are liable to confiscation and such person/entity knew or had reason to believe about the said fact. As discussed in the foregoing paras, Shri Lamba was CEO of Continental. Therefore, it can be said that Continental was aware through Shri Lamba about the nature of the goods manufactured by SIPL and dealt with by Continental. In other words, it can be said that Continental was aware of the fact that the offending goods received by them from SIPL were liable for confiscation. For the aforesaid reasons, Therefore Continental too have rendered themselves liable for penalty Under rule 209 A of the Central Excise Rules, 1944. 19,. In view of the discussion and findings, supra, I hold that that out of the demand of total amount of Rs.28,79,621 /-, the demand of 8,26,886/- sustains and the same is recoverable from SIPL Un....
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.... 22,900/- Total 45893/- Less Discount of 10% 4589/- Add 7% other charges 2891/- Invoice Value 44,195/- Total Invoice Value of 16 & 18 1,46,997/- It is contended by the appellant that these invoices are in respect of the goods supplied to against order received for supply of Credenza and Storage Cabinets. These goods are initially manufactured in the factory of the appellants, in parts and accounted for in the RG-1 register as parts, the figure of 44 pieces is reflected in RG-1 Register. On assembling at site of by putting together these 44 pieces, brings into existence the Credenza and Storage Cabinets. Central Excise Invoice No 16 dated 20.04.2001 only consisted of 3 types of parts. While Invoice no 18 dated 20.04.2001 consisted of about 34 parts removed in 5 packages and being sufficient to bring into existence of 5 number of Storage Cabinets as an immovable structure at the site of HFCL. The Central Excise Invoices referred to the description for which order was placed on the appellants giving the number of complete credenza/ storage cabinets supplied by the ....
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....rity, ignoring the fact that entire demand is based on the statement of Shri Soni, goes contrary to the settled position in law as per the following decisions. Basudev Garg [2013 (294) ELT 353 (DEL.)] J & K Cigarrettes Ltd.[2009 (242) ELT 189 (DEL.)] Andaman Timber Industries [2015 (324) ELT 641 (SC)] Intermetal Trade Ltd. [2014 (308) ELT 481 (T)] 4.7 Demand of Rs 70,320/- towards the goods lying within the factory as per the panchnama: Undisputedly as contended by the appellant it is settled position in law that the central excise duty is to be paid only at the time of clearance of the goods from the factory. Admittedly in the present case the panchnama dated 04.09.2001 records as follows: "The officers also conducted the verification of stock physically, lying in the premises. It was noticed that the company had manufactured and installed office furniture in their office & canteen premises and Shri D L Soni, Manager (Excise) informed that the same was not entered in the RG 1 register of the company and they have not paid any duty on them. The details of stock verification are listed in Annexure B to this Panchnama. The value of g....
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....hereby, the revenue has come up in appeal to this Court. In our opinion, the order of the Tribunal must be sustained. In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. 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, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts refe....
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.... in Continental Foundation Joint Venture case (supra) was held to be not correct in a subsequent larger Bench judgment. It is, therefore, clear that there was scope for entertaining doubt about the view to be taken. The Tribunal apparently has not considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act." Thus I do not find any merits in this demand by invoking the extended period of limitation as per proviso to section 11A (1). 4.9 On the imposition of penalty Penalty on Appellant 1: In view of the fact that against the total demand of Rs.8,26,886/- which has been upheld by impugned order, I am not in position to the demand beyond Rs 70,320/-. Accordingly penalty under Section 11AC imposed on the Appellant is reduced to Rs 70,320/- from Rs 8,26,886/- imposed by the original authority and affirmed by the impugne....