TMI Blog2010 (2) TMI 243X X X X Extracts X X X X X X X X Extracts X X X X ..... jesh H. Shukla ,JJ. Shri R. J. Oza, for the Appellant. None, for the Respondent. [Judgment per: Rajesh H. Shukla, J. (Oral)] . - The present tax appeals have been field by the Commissioner of Central Excise Customs, Surat-II under Section 35-G of the Central Excise Act, 1944 proposing to raise the following substantial question of law: "Whether in the facts and circumstances of the case, the Tribunal has committed a substantial error of law in reducing the penalty on the respondent from Rs.2 crores to Rs.20 lakhs?" 2. Learned Sr. Standing Counsel Mr. R.J. Oza referred to the show cause notice as well as the orders passed by the Commissioner, Central Excise Customs, Surat-II and also the CESTAT in Appeal Nos. 309 to 312 of 2006. He referred to the order passed by the Tribunal dated 8-8-2008 [2009 (233)E.L.T. 210 (Tri. - Ahmd.)] which though has confirmed the order passed by the Commissioner imposing interest and penalty against the firm M/s. LD Textile Industries Ltd. has also confirmed the imposition of penalty upon the three appellants. However, the penalty on the three appellants who are directors or managers of the firm M/s. L.D. Textile Industries L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down by catena of judicial pronouncements by the Hon'ble Apex Court also that reasons are required to be recorded and any order without reasons is liable to be set aside even if it is with regard to the penalty. He has referred to and relied upon the judgment of the Hon'ble Apex Court in the case of Tata Engineering Locomotive Co. Ltd. v. Collector of C. Ex., Pune , reported in 2006 (203) E.L.T. 360 (S.C.). Similarly, he has referred to and relied upon the judgment of the Apex Court in the case of Commissioner of Central Excise, Lucknow v. Wimco Ltd., 2007(217) RL.T. 3 (S.C.) and has emphasised the observations made therein. He has also referred to the judgment reported in 2008 (228) E.L.T.505 (S.C.) = 2009 (16) S.T.R. 516 (S.C.) in the case of Commissioner of Central Excise, New Delhi v. GTC Industries Ltd . particularly the observations made in para 5. The learned counsel has also referred to and relied upon the judgment of the Hon'ble Apex Court in the case of Commissioner of Central Excise, Bangalore v. Srikumar Agencies , 2008 (232) E.L.T. 577 (S.C.) = 2009 (13) S.T.R. 3 (S.C.) He abs also referred to the judgment of the Bombay High Court in the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order passed by the Tribunal in that particular case. In the facts of the present case, as can be seen, there is a reasoned order passed by the Tribunal on the merits of the case discussing on the issues involved and therefore it cannot be said that the order passed by the Tribunal is without any reason so far as the merits are concerned. Therefore, the reasons are required to be recorded while considering the matter with regard to the merits or issues involved in it. 8. It is well accepted that the reasons are reflecting the decision making process. The Hon'ble Apex Court in a judgment in the case of Ran Singh and anr. v. State of Haryana and anr., reported in (2008)4 SCC 70 has observed and has also quoted Lord Denning which reads as under: "5 Reasons introduce clarity in an order. On plainest consideration of justice, the High Court ought to have set forth its reasons, howsoever brief, in its order indicative of an application of its mind, ... The absence of reasons has rendered the [ Court's judgment] not sustainable... 6. ... Even in respect of administrative orders, Lord Denning, MR. In Breen v. Amalgamated Engg. Union - (1971) 2 QB 175 observed (All ER p. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times the value of such goods or five thousand rupees, whichever is greater." Thus, it provides for discretion that penalty not exceeding three times the value of such goods or five thousand rupees, whichever is greater could be imposed. Therefore, once the discretion is vested with the Tribunal and in exercise of such discretion has, while confirming the order passed by the lower authority, only modified the penalty qua the individual directors or managers, can it be said that it is an order without reasons or non-application of mind? 10. The judgments which have been referred to and relied upon as stated above by the learned counsel though emphasise on the aspect of the need for recording of reasons where in each case the facts were different. In such cases the either Tribunal had, while differing with the view taken by the lower authority, not recorded the reasons or had not discussed with regard to arriving at a different conclusion on the merits of the case or the issues i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er period of limitation. We accordingly reject the said plea. 19. In view of the foregoing, we confirm the duty along with confirmation of interest and imposition of penalty of identical amount against M/s. L.D. Textile Industries Ltd. However, the confiscation of plant and machinery, land and building etc. is set aside." 12. It has confirmed the imposition of the duty and penalty passed by the Commissioner and thereby has confirmed the duty amounting to Rs.7,90,02,082.65 on the firm M/s. L.D Textile Industries Ltd. and has also confirmed an equal amount of penalty on the firm. It has further confirmed the order regarding the confiscation of plant a, machinery or payment of fine of Rs.2 crores. However, the latter part, i.e., clause (iv) to (vi) in the order passed by the Commissioner where the penalty of Rs. 2 cores has been imposed upon the Chief Executive Mr. Yogesh Mehra, Mr. S.M. Vij, General Manager (Works) and Mr. SM. Pareekh, General Manager (Commercial), it is modified to Rs.20 lakhs each, which is the bone of contention in the present appeal. Penalty on the individuals have been imposed under rule 290A of Central Excise Rules and as discussed above it gives discreti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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