Cce, Madurai Vs. M/S. Janaki Packaging Pvt. Ltd. - Court Judgment

SooperKanoon Citationsooperkanoon.com/943736
CourtCustoms Excise and Service Tax Appellate Tribunal CESTAT Chennai
Decided OnMay-05-2009
Case NumberE/CO/149 of 2003 & E/554 of 2002
Judge HON’BLE MS. JYOTI BALASUNDARAM, VICE PRESIDENT & HON’BLE MR. P. KARTHIKEYAN, MEMBER (TECHNICAL)
AppellantCce, Madurai
RespondentM/S. Janaki Packaging Pvt. Ltd.
Advocates:For the Appearing Parties: V.V. Hariharan, JCDR , R. Masilamoney, Consultant.
Excerpt:
jyoti balasundaram, duty demand of rs. 44,162/- confirmed by the additional commissioner on packing material (corrugated boxes) supplied free by m/s. metal powder co. ltd., to the respondents herein without inclusion of such goods in the assessable value of goods manufactured and cleared using such material has been upheld by the commissioner (a), who however has dropped the penalty imposed upon the assessees under section 11 ac of the central excise act, 1944, on the ground that there was no willful suppression on the part of the assessees with an intent to evade payment of duty. 2. we have heard both sides. we find that it is accepted that the receipt of free packing material received from the buyers was made known to the department voluntarily by the appellants, who had produced all the documents relating to the supply of corrugated boxes before the internal audit officers. therefore, the charge of suppression cannot be sustained and although the assessees have not challenged the confirmation of the additional duty demand under the extended period, it does not mean that penalty also should be retained in the light of the fact that supply of free packing material to assessees was well within the knowledge of the department. we therefore hold that penalty on the respondents is not warranted, uphold the impugned order and reject the appeal. 3. the prayer in the cross objection is for rejection of the revenues appeal for retaining penalty and therefore, the cross objection is allowed.
Judgment:

Jyoti Balasundaram,

Duty demand of Rs. 44,162/- confirmed by the Additional Commissioner on packing material (corrugated boxes) supplied free by M/s. Metal Powder Co. Ltd., to the respondents herein without inclusion of such goods in the assessable value of goods manufactured and cleared using such material has been upheld by the Commissioner (A), who however has dropped the penalty imposed upon the assessees under Section 11 AC of the Central Excise Act, 1944, on the ground that there was no willful suppression on the part of the assessees with an intent to evade payment of duty.

2. We have heard both sides. We find that it is accepted that the receipt of free packing material received from the buyers was made known to the department voluntarily by the appellants, who had produced all the documents relating to the supply of corrugated boxes before the internal audit officers. Therefore, the charge of suppression cannot be sustained and although the assessees have not challenged the confirmation of the additional duty demand under the extended period, it does not mean that penalty also should be retained in the light of the fact that supply of free packing material to assessees was well within the knowledge of the department. We therefore hold that penalty on the respondents is not warranted, uphold the impugned order and reject the appeal.

3. The prayer in the cross objection is for rejection of the Revenues appeal for retaining penalty and therefore, the cross objection is allowed.