Rollatainers Ltd. Vs. Commissioner of C. Ex.

Rollatainers Ltd. vs Commissioner of C. Ex.

Type Court Judgment Court Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi Decided Nov 06, 2006

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Citation: sooperkanoon.com/43998
Court: Customs Excise and Service Tax Appellate Tribunal CESTAT Delhi
Judge: S Kang, Vice-, N T C.N.B.
Decided On: Nov 06, 2006
Subject: Excise

Case Summary

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

Excise

Key legal issue: Excise

Parties & Advocates

Appellant / Petitioner

Rollatainers Ltd.

Respondent

Commissioner of C. Ex.

Excerpt

2. the appellant is a manufacturer of weighing machines and packaging machines. they have been removing those goods after payment of central excise duty.3. on 22-9-99, supdt. of central excise visited their factory and pointed out that the appellant had been removing mixed scrap (as revealed from their books of accounts) without payment of duty. he also pointed out that duty was required to be discharged on those clearances. thereupon, the appellant deposited an amount of rs. 87,349/-.4. subsequently, on 27-11-2000, a scn was issued alleging that during the period 1-4-94 to 22-9-99, the duty payable on the removal of waste and scrap was rs. 54,632/-. thus, there was an excess payment of about rs. 32,717/- by the appellant. the notice alleged that the appellant was liable to penalty under section 11 ac of the central excise act.5. the appellant resisted the allegation relating to penalty by contending that the non-payment of duty on mixed scrap was a bonafide error and there was no indent to evade payment of duty and therefore, no penalty is attracted. these submissions failed and penalty was imposed on the appellant. the present appeal challenges the penalty.6. during the hearing of the case, ld. counsel for the appellant has contended that facts of the case would clearly bring out that the appellant could not even be aware of the fact that any tax is attracted on the scrap in question. it is being pointed out that the mixed scrap arose from various operations and are not the result of any manufacture. ld. counsel would point out that the record of the case brings out that duty demand is including on wood scrap. it is also his submission that the scrap in question is not of significant value and the appellant had no deliberate policy about the excise aspect of it.7. ld. dr would submit that there could be no dispute that aluminium and iron scrap attracted duty and since the arising and disposal of these scrap items was not disclosed to central excise authorities,.....

Full Judgment

2. The appellant is a manufacturer of Weighing Machines and Packaging Machines. They have been removing those goods after payment of Central Excise Duty.

3. On 22-9-99, Supdt. of Central Excise visited their factory and pointed out that the appellant had been removing mixed scrap (as revealed from their books of accounts) without payment of duty. He also pointed out that duty was required to be discharged on those clearances. Thereupon, the appellant deposited an amount of Rs. 87,349/-.

4. Subsequently, on 27-11-2000, a SCN was issued alleging that during the period 1-4-94 to 22-9-99, the duty payable on the removal of waste and scrap was Rs. 54,632/-. Thus, there was an excess payment of about Rs. 32,717/- by the appellant. The notice alleged that the appellant was liable to penalty under Section 11 AC of the Central Excise Act.

5. The appellant resisted the allegation relating to penalty by contending that the non-payment of duty on mixed scrap was a bonafide error and there was no indent to evade payment of duty and therefore, no penalty is attracted. These submissions failed and penalty was imposed on the appellant. The present appeal challenges the penalty.

6. During the hearing of the case, Ld. Counsel for the appellant has contended that facts of the case would clearly bring out that the appellant could not even be aware of the fact that any tax is attracted on the scrap in question. It is being pointed out that the mixed scrap arose from various operations and are not the result of any manufacture. Ld. Counsel would point out that the record of the case brings out that duty demand is including on wood scrap. It is also his submission that the scrap in question is not of significant value and the appellant had no deliberate policy about the excise aspect of it.

7. Ld. DR would submit that there could be no dispute that aluminium and iron scrap attracted duty and since the arising and disposal of these scrap items was not disclosed to Central Excise authorities, the Commissioner was right in holding that there was suppression of facts with intent to evade duty and in the imposition of penalty.

8. We find merit in the appellant's submission. The value of the scrap in question was less than Rs. 6 lakhs for the period of 1994 to 1999.

All items including wooden scrap, which did not attract any excise duty, have been included in the demand. The appellant deposited the amount without going into the merits of the demand or the question of limitation. Thus, an excess payment of Rs. 32,717/- took place. Part of the period of demand goes beyond the extended period of five years also. Penalty under Section 11 AC and interest under Section 11AB are attracted only if duty evasion has resulted from intentional suppression of facts. In the facts of the present case, it is difficult to hold that the appellant had any intent to evade duty. The amount involved was insignificant and assorted scrap was being disposed of for what they fetched. Part of the scrap was wooden scrap which was not excisable at all. In this factual situation, the only conclusion possible is that non-payment of duty is the result of an unintentional lapse and not the result of intentional suppression of facts.

9. In view of what is stated above, we set aside the penalty and the demand for interest. The appeal is allowed to this extent.

Same Court & Year Customs Excise and Service Tax Appellate Tribunal CESTAT Delh... Same Parties Rollatainers Ltd. vs Commissioner of C. Ex. Same Subject Excise Same Judge S Kang, Vice-, N T C.N.B.