P.R. Chandrasekharan:
This appeal has been filed by the Revenue against the Order-in-Appeal No: BPS(421)/80/2003 dated 16/12/2003 passed by the Commissioner of Central Excise and Customs (Appeals), Aurangabad.
2. In the impugned order the lower appellate authority has set aside the penalties on the appellant M/s. Sark Chemicals (P) Ltd. and Shri S.S. Saboo, Director of the company. Hence the Revenue is before me.
3. The relevant facts for consideration in this case are as follows:
3.1. The respondent is a manufacturer of Ferric Alum and cleared the goods. The respondent also collected packing charges separately in respect of the same; however, they did not include the same in the assessable value of the goods. Thus, there was a short-payment of duty to the extent of Rs. 48,383/-. The respondent was also availing small-scale exemption and on the date of availing of small-scale exemption, there was duty-credit in their books of accounts amounting to Rs. 9,575/- which the respondent failed to reverse. Thus, a show cause notice was issued to the respondent for recovery of these amounts along with interest thereon and also proposing for imposition of penalty. Demands were confirmed along with interest vide order-in-original dated 31/03/2003 and a demand of Rs. 57,858/- was confirmed against the respondent and penalty of equivalent amount were imposed on the respondent-firm under Rule 173Q(1)(d) of the erstwhile Central Excise Rules, 1944 and on the Director of the respondent-firm under Rule 209A of the Central Excise Rules, 1944. The respondent had already paid this amount when the mistake was pointed out to them, before the issuance of the show cause notice.
3.2. The respondent preferred an appeal before the Commissioner (Appeals) who vide the impugned order set aside the penalties, accepting the contentions of the respondents that the payment was not made through oversight and was on account of ignorance and therefore, penalty was not warranted inasmuch as the respondent voluntarily paid the duty involved in the matter.
4. The learned AR appearing for the Revenue states that there was suppression on the part of the respondent and, therefore, imposition of equivalent amount of penalty is justified inasmuch as the respondent did not show these recoveries in the invoices nor did they intimate the department about the recoveries. He, therefore, prays for setting aside the order of the lower appellate authority.
5. None appeared on behalf of the respondent. I have gone through the written submissions of the respondent wherein they have stated that the mistake occurred due to misunderstanding of law and through oversight and, therefore, they pleaded for upholding the order of the lower appellate authority.
6. I have carefully considered the rival submissions.
6.1. From the statements recorded by the investigation under Section 14 of the Central Excise Act, 1944 the appellant nowhere has inculpated himself regarding suppression of facts or willful mis-statement of facts. While he has admitted that he has not paid the duty on the packing charges, he has clearly stated this occurred due to oversight. In the absence of any inculpatory statement on the part of the appellant, the charge of suppression of facts and willful mis-statement of facts is not established. The hon’ble apex Court in the case of Continental Foundation Jt. Venture [2007 (216) ELT 177 (SC)] has held that mere omission on the part of the assessee to intimate a fact to the department does not amount to suppression. Suppression would arise only when there is an intent to evade payment of duty; then only penalty can be imposed. Inasmuch as the department has not adduced any evidence to prove suppression in the instant case, the lower appellate authority has rightly set aside the penalty imposed on the respondent.
7. Thus, I do not find any merit in the department’s appeal and the same is dismissed.