Texphos Vs. Commissioner of Central Excise

Texphos vs Commissioner of Central Excise

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai Decided Sep 15, 2005

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https://sooperkanoon.com/case/40268

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Citation: sooperkanoon.com/40268
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Mumbai
Judge: S T S.S.
Decided On: Sep 15, 2005
Subject: Excise

Case Summary

AI-generated summary - not the official court judgment text.

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Texphos

Respondent

Commissioner of Central Excise

Legal References

Reported In: (2006)(193)ELT492Tri(Mum.)bai

Excerpt

.....appeals are being disposed by this common order, after hearing both sides.2. a case of removal of inputs, on which credit was availed, was made out on the assessee, as on the date of the visit of the officers, the inputs could not be accounted satisfactorily to the officers, who noticed a shortage of the inputs. the notice issued on 10-4-2000, sought the assessee and the partner to show cause as to why - (i) central excise duty amounting to rs. 1,51,441.00 on inputs illicitly cleared and sold, without reversal of credit/payment of duty should not be recovered from the assessee. (ii) penalty under rule 173q(1) of the central excise rules, 1944 read with section 11ac be not imposed along with interest under section 11ab on the assessee. (iii) and confiscation of plant, machinery, land & building of assessee, not be arrived at under rule 173q(2)(a) of the central excise rules, 1944. (i) did not uphold the liability of confiscation under rule 173q(2)(a) as proposed. (ii) confirmed the duty amount of rs. 1,51,44/- under rule 57-i read with rule 9(2) and section 11a along with interest under section 11ab. (iii) imposed a penalty of rs. 25,000/- under rule 173q(1) on the as-sessee. (iv) a penalty of rs. 1,51,44/- was imposed on the assessee under section 11 ac read with rule 57-i on assessee. (v) penalties of rs. 10,000/- was imposed on the partner under rule 209a. (i) since duty has already been paid, by the appellants and the same is not being contested, the contest in the appeal was limited to the penalty under rule 173q(1) and 11ac. a lenient view was therefore called for. (ii) the penalty under rule 173q of rs. 25,000/- was set aside and penalty under section 11ac was reduced to rs. 75,000/-. (iii) no findings were arrived as regards the penalty of rs. 10,000/- on the partner. 2.4 (i) revenue is in appeal against the reduction of penalty under section 11ac and setting aside of penalty under rule 173q. (ii) assessee wants the setting aside of penalty under.....

Full Judgment

1. These appeals filed by an assessee under the Central Excise Act, 1944, & partner of the firm, and Revenue, against the same order of CCE (A), The appeals are being disposed by this common order, after hearing both sides.

2. A case of removal of inputs, on which credit was availed, was made out on the assessee, as on the date of the visit of the officers, the inputs could not be accounted satisfactorily to the officers, who noticed a shortage of the inputs. The notice issued on 10-4-2000, sought the assessee and the partner to show cause as to why - (i) Central Excise duty amounting to Rs. 1,51,441.00 on inputs illicitly cleared and sold, without reversal of credit/payment of duty should not be recovered from the assessee.

(ii) Penalty under Rule 173Q(1) of the Central Excise Rules, 1944 read with Section 11AC be not imposed along with interest under Section 11AB on the assessee.

(iii) and confiscation of plant, machinery, land & building of assessee, not be arrived at under Rule 173Q(2)(a) of the Central Excise Rules, 1944.

(i) did not uphold the liability of confiscation under Rule 173Q(2)(a) as proposed.

(ii) Confirmed the duty amount of Rs. 1,51,44/- under Rule 57-I read with Rule 9(2) and Section 11A along with interest under Section 11AB. (iii) Imposed a penalty of Rs. 25,000/- under Rule 173Q(1) on the as-sessee.

(iv) A penalty of Rs. 1,51,44/- was imposed on the assessee under Section 11 AC read with Rule 57-I on assessee.

(v) Penalties of Rs. 10,000/- was imposed on the partner under Rule 209A. (i) since duty has already been paid, by the appellants and the same is not being contested, the contest in the appeal was limited to the penalty under Rule 173Q(1) and 11AC. A lenient view was therefore called for.

(ii) The penalty under Rule 173Q of Rs. 25,000/- was set aside and penalty under Section 11AC was reduced to Rs. 75,000/-.

(iii) No findings were arrived as regards the penalty of Rs. 10,000/- on the partner.

2.4 (i) Revenue is in appeal against the reduction of penalty under Section 11AC and setting aside of penalty under Rule 173Q. (ii) Assessee wants the setting aside of penalty under Section 11AC and order of interest.

(iii) Partner wants the setting aside of the penalty under Rule 209A.3.1 After hearing both sides and considering the material, it is found - (a) demand of Rs. 1,51,44/- under Rule 57-I cannot be now challenged before the CEGAT. The same has been arrived at on finding a shortage of duty credit availed inputs, during the visit of the officers and there is an admission of the partner of having sold the inputs in cash without reversing the credit/discharge of duty. Amount of Rs. 15144/- is confirmed as demanded under Rule 57-I as held by the Jt.

Commissioner.

(b) Penalty under Rule 173Q(l)(bb) of Rs. 25,000/- arrived by Jt.

Commissioner on grounds of non-accountal of inputs has been set aside by the CCE (A) only on grounds of leniency. Penalty under Rule 173Q(1), if liable has to be imposed, discretion could be exercised up to the minimum of Rs. 5,000/- stipulated therein. Discretion exercised by Jt. Commissioner cannot be found fault with CCE (A)'s order setting aside of Rs. 25,000/- penalty is therefore not upheld, the penalty order under Rule 173Q(1) Rs. 25000/- arrived by Jt.

Commissioner is restored.

(c) Since it is a case of removal of inputs and demands of credit under Rule 57-I, invocation of Section 11A(1) proviso clause for duty and or Section 11 AC penalty applicable only on duty determined cannot be invoked. Since no 'duty' under Section 11A of the Central Excise Act, 1944 is required to be or determined in this case.

Penalty under Section 11AC and interest under Section 11AB therefore cannot be upheld. (d) Since the only proposal for confiscation under the show cause notice was of plant building and material under Rule 173Q(2)(a) and that was not been upheld by the Jt. Commissioner, penalty under Rule 209A on the partner cannot be upheld since there is no case or liability to confiscation found of any goods to be made out and upheld or arrived.

(e) I follow the decision in case of Zunjarao Bhikaji Nagarkar v. UOI and Ors. ; CCE, Jaipur v. Raghuvar (I) Ltd. , to arrive at the decisions herein above.

3.2 Consequently the appeal of partner is allowed in full; appeal of as-sessee allowed as regards setting aside penalty under Section 11AC and interest under Section 11AB and the appeals of Revenue allowed as Regards upholding the penalty of Rs. 25,000/- under Rule 173Q(1) only.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Mumb... Same Parties Texphos vs Commissioner of Central Excise Same Subject Excise Same Judge S T S.S.