Videocon International Ltd. Vs. Collector of C. Ex. - Court Judgment

Excerpt:
1. though only stay petition was listed for hearing today, at the request of the appellants and consent from the ld. sdr, the entire appeal is taken up for hearing by granting waiver against pre-deposit.2. the appeal is directed against the order in appeal no. a-182/93, dt.13-9-1993 confirming the order in original no. dy.collr./vil/kps/010/4/93, dt. 22-2-1993 imposing a personal penalty of rs. 25,000/- on the appellants.3. the appellants availed of modvat credit on differential duty paid by the suppliers on the strength of certificate issued by the range superintendent for certifying payment of additional duty on the gate passes mentioned in the certificate. during verification it was found that one of the gate passes in .respect of which the differential duty amounting to rs. 2,40,000/- plus rs. 24,000/- was paid, did not relate to the appellants but was for another unit of the appellants at gandhinagar, and availment of the modvat credit was not available to the appellants. on noticing the same, the appellants reversed the modvat credit. however, a show cause notice was issued to the appellants calling upon them to show cause why the penalty should not be imposed. adjudication was conducted and the penalty of rs. 25,000/- was imposed, which on appeal before collector (appeals), stood confirmed.4. shri bulchandani, the learned advocate, appearing for the appellants has submitted that this was only a genuine error on the part of the appellants arising out of the single certificate issued by the jurisdictional supdt. in relation to several gate passes for which the credit was available to this unit. possibly because of some error also on the part of the supdt. in the said certificate, he included the gate passes which related to the gandhinagar unit of the appellants and the officer in charge of the excise in the factory mistook as their own gate passes and took the credit to the extent of the amount subsequently demanded by the deptt. and the credit for which was immediately reversed. he has submitted that no credit was taken by the gandhinagar unit in relation to the said entry and as such here was not a case of taking of double credit with any loss to the revenue. in his submission, the imposition of a penalty in the case of such a bona fide manner would operate as a stigma on a company, with high reputation and without any blemishes on their part. in his submission therefore, the order of penalty should be set aside.5. shri mondal, the learned sdr, while supporting the order has submitted that the officers of the appellants ought to have taken care to ascertain whether all the gate passes for which the range supdt.issued the certificate, related to their unit. taking of the credit without checking of the same and taking the credit to the extent of over rs. 2.50 lakhs, would certainly tantamount to negligence on the part of the appellants and the same would make them liable for imposition of a penalty. in his submission when the firm has committed something wrong, the penalty has to be imposed, even for the purpose of keeping them alert for the future behaviour.6. considering the submissions made and going through record, it appears that some element of negligence and absence of perfection is found at both the ends. the jurisdictionar supdt. ought to have taken care to see that they issued the certificates only in relation to the appellant's unit at ahmednagar and ought not to have certified the gate passes for the goods which had gone to the gandhinagar unit. at the same time, the officers of the appellant co. also ought to have seen that the credit was in relation to the gate passes under which the goods had come to their unit and ought to have made a cross-checking before posting the entries for availment of the credit: it however, cannot be said that the appellants are not guilty of lapses and that the lapse was only a bona fide one. in the case of revenue, such lapses ought not to be overlooked. however, when for the reasons stated above, the deptt. also ought to have been more careful in issuing the certificates and considering the fact that there is no lapse of this type reported in the past and there is no loss to revenue, imposition of a penalty might operate as a stigma which is not called for. under the circumstances, it appears that to meet the ends of justice, while upholding that the penalty could be imposed, the order of the authority below is modified to the extent that instead of imposition of penalty of rs. 25,000/- a censure should be given to the appellants be more careful in future with the observation that if such a thing is repeated in future, a very serious view would be taken. the appeal is disposed of accordingly.

Judgment:
1. Though only stay petition was listed for hearing today, at the request of the appellants and consent from the ld. SDR, the entire appeal is taken up for hearing by granting waiver against pre-deposit.

2. The appeal is directed against the Order in Appeal No. A-182/93, dt.

13-9-1993 confirming the order in original No. Dy.

Collr./Vil/KPS/010/4/93, dt. 22-2-1993 imposing a personal penalty of Rs. 25,000/- on the appellants.

3. The appellants availed of Modvat credit on differential duty paid by the suppliers on the strength of certificate issued by the Range Superintendent for certifying payment of additional duty on the gate passes mentioned in the certificate. During verification it was found that one of the gate passes in .respect of which the differential duty amounting to Rs. 2,40,000/- plus Rs. 24,000/- was paid, did not relate to the appellants but was for another unit of the appellants at Gandhinagar, and availment of the Modvat credit was not available to the appellants. On noticing the same, the appellants reversed the Modvat credit. However, a show cause notice was issued to the appellants calling upon them to show cause why the penalty should not be imposed. Adjudication was conducted and the penalty of Rs. 25,000/- was imposed, which on appeal before Collector (Appeals), stood confirmed.

4. Shri Bulchandani, the learned Advocate, appearing for the appellants has submitted that this was only a genuine error on the part of the appellants arising out of the single certificate issued by the jurisdictional Supdt. in relation to several gate passes for which the credit was available to this unit. Possibly because of some error also on the part of the Supdt. in the said certificate, he included the gate passes which related to the Gandhinagar unit of the appellants and the officer in charge of the Excise in the factory mistook as their own gate passes and took the credit to the extent of the amount subsequently demanded by the deptt. and the Credit for which was immediately reversed. He has submitted that no credit was taken by the Gandhinagar unit in relation to the said entry and as such here was not a case of taking of double credit with any loss to the revenue. In his submission, the imposition of a penalty in the case of such a bona fide manner would operate as a stigma on a Company, with high reputation and without any blemishes on their part. In his submission therefore, the order of penalty should be set aside.

5. Shri Mondal, the learned SDR, while supporting the order has submitted that the officers of the appellants ought to have taken care to ascertain whether all the gate passes for which the Range Supdt.

issued the certificate, related to their unit. Taking of the credit without checking of the same and taking the credit to the extent of over Rs. 2.50 lakhs, would certainly tantamount to negligence on the part of the appellants and the same would make them liable for imposition of a penalty. In his submission when the firm has committed something wrong, the penalty has to be imposed, even for the purpose of keeping them alert for the future behaviour.

6. Considering the submissions made and going through record, it appears that some element of negligence and absence of perfection is found at both the ends. The Jurisdictionar Supdt. ought to have taken care to see that they issued the certificates only in relation to the appellant's unit at Ahmednagar and ought not to have certified the gate passes for the goods which had gone to the Gandhinagar unit. At the same time, the officers of the appellant Co. also ought to have seen that the credit was in relation to the gate passes under which the goods had come to their unit and ought to have made a cross-checking before posting the entries for availment of the credit: It however, cannot be said that the appellants are not guilty of lapses and that the lapse was only a bona fide one. In the case of Revenue, such lapses ought not to be overlooked. However, when for the reasons stated above, the deptt. also ought to have been more careful in issuing the certificates and considering the fact that there is no lapse of this type reported in the past and there is no loss to Revenue, imposition of a penalty might operate as a stigma which is not called for. Under the circumstances, it appears that to meet the ends of justice, while upholding that the penalty could be imposed, the order of the authority below is modified to the extent that instead of imposition of penalty of Rs. 25,000/- a censure should be given to the appellants be more careful in future with the observation that if such a thing is repeated in future, a very serious view would be taken. The appeal is disposed of accordingly.