TMI Blog2010 (2) TMI 606X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for any penalty – Held that: - appellant has sold the goods through online process and on ex-factory basis and on ex-factory basis and delivered the goods to the purchasers at factory gate on payment of duty - goods against this invoices were never moved - vehicle number entered in the invoices were NOT correct and the statement of truck owner that the vehicle mentioned in the invoices never entered in the factory premises of the appellant and the statement of the truck owner was not contravorted by the appellant - duty of the supplier of goods to enter the correct number of vehicles in their invoice while clearing the goods and in this case the vehicles which are mentioned in the invoice did not carry the goods at the time of clearance - appellant cannot escape from the liability of penalty. - E/1152-1156 and 1171/2008 - A/88-93/2010-WZB/C-IV/SMB - Dated:- 10-2-2010 - Shri Ashok Jindal, Member (J) REPRESENTED BY: S/Shri Mayur Shroff and Krishna Kumar, Advocates, for the Appellant. Shri Kishorilal, SDR, for the Respondent. [Order]. - These appeals are filed by (a) M/s. Nasik Strips Pvt. Ltd. (NSPL) (b) its Director Shri K.K Agarwal, (c) M/s. Akshar Trading C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vent the penalty be reduced to 25% of the duty confirmed giving the benefit of the proviso to Section 11AC as they have paid the duty before the issuance of the show cause notice. To support to their contention, they placed reliance: K.P. Pouches Ltd. v. Union of India - 2008 (228) E.L.T. 31 (Del.) Commissioner of Central Excise v. Marl bro Appliances P. Ltd. - 2007 (208) E.L.T. 503 (Del.) = 2007 (5) S.T.R. 256 (Del.) Commissioner of Central Excise, Rohtak v. J.R. Fabrics (P) Ltd. - 2009 (238) E.L.T. 209 (P H) Balaji Exports v. Commissioner of Central Excise, Surat - 2009 (237) E.L.T. 505 (Tri.-Ahmd.) (A) M/s. Nashik Strips Pvt. Ltd. It is submitted that- Without prejudice to the other submissions made In the Appeal Memorandum, the quantum of penalty under 11AC may be reduced to 25% of the duty amount. On behalf of (B Shri K.K. Agarzval, Director of Nashik Strips Pvt. Ltd.: Penalty of Rs. 2,04,529/- has been imposed by the learned Deputy Commissioner under Rule 26 of the Central Excise Rules, 2002. The aforesaid penalty have been upheld by the learned Commissioner (Appeals) vide his order dated 28-8-08. It is submitted that :- (i) The allegation against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T. 408 (Tribunal); 4. Commissioner of Customs (Export), Mumbai v. M.K. Industries -2008 (230) E.L.T. 91 (Tri. -Mumbai); 5. Air Carrying Corporation Pot. Ltd. v. Commissioner — 2008 (229) E.L.T. 80 (Tribunal) (vi) Without prejudice to the above submission it is also submitted that the penalty of Rs. 2,04,529/- is harsh and exorbitant. No valid and justifiable reasons are forthcoming in the adjudication order for imposing such harsh and unreasonable penalty on the Appellant nor any valid reasons are forthcoming in the impugned order for sustaining such penalty. Also, the penalty of equal amount of duty imposed on the Company as well as each of the co-noticees also shows arbitrary exercise of powers vested in the authority and clear non-application of mind. Thus, such harsh and unreasonable penalty cannot be sustained and even if penalty is held to be imposable, a reduction in penalty amount is prayed for. (C) M/s. Akshar Trading Co. , M/s. Master Traders Memon Associates A penalty of Rs. 2,04,529/- has been imposed on the aforesaid three firms vide Order-in-Original dated 5-2-08. Penalty has been imposed under Rule 26 of the Central Excise Rules, 2002. The concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese rules (emphasis supplied), shall be liable to a penalty not exceeding the duty on such goods or rupees ten thousand, which ever is greater. It is not the Department's case that the HR Trimmings removed by M/s. JISCO Ltd. were liable for confiscation. Furthermore, from the plain reading of Rule 26 it is manifest that penalty under Rule 26 is imposable if excisable goods have been rendered liable for confiscation under the Act or the Central Excise Rules, 2002. No contravention of the Central Excise Act or the Central Excise Rules, 2002 is alleged or averred against the aforesaid Appellants. Thus the invocation of the provisions of Rule 26 of the Central Excise Rules, 2002 against the aforesaid Appellants is mi conceived and unsustainable. It is thus submitted that the impugned order upholding penalty under Rule 26 of the Central Excise Rules, 2002 is unsustainable and deserves to be set aside. (ii) Without prejudice to the above submissions it is submitted that Rule 26 of the Central Excise Rules, 2002 permits imposition of penalty on a person and not a firm. In the present case, penalties have been imposed on the firms. Thus, the impugned order is unsustain able. The decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved. In the present case also it is the Department's case that no goods had moved to Nashik Strips Pvt. Ltd. and only invoices had moved to M/s. Nashik Strips Pvt. Ltd. Thus the decision in the case of M/s. Steel Tubes of India Ltd. is squarely applicable to the facts of the pre sent case. The decision of the Apex Court in Sachidananda Banerjee ACC Calcutta v. Sitaram Agarwal - 1999 (110) E.L.T. 292 (S.C.) is also inapplicable in the facts and circumstances of the present case. In the said case, the Apex Court, inter-alia, held that even though the Appellant (Sitaram) had not come into actual possession of the smuggled gold before the police intervened there was no doubt that he was concerned in dealing with prohibited goods. In the present case, it is not the case of the Department that the HR Trimmings were offending goods which were liable for confiscation. Thus, the Appellants cannot be said to be in any way concerned with any goods liable for confiscation and there is neither an averment nor a finding of the lower authorities that the Appellants has dealt with any goods which were liable for confiscation. Under the circum stances the Apex Court judgment in Sachidananda Banerje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal in the case of M/s. Wood men Industries v. Commissioner - 2004 (164) E.L.T. 339 (Tribunal) was specifically in the context of Rule 26 of the Central Excise Rules, 2002 and the same has been maintained by the Hon'ble Apex Court in Commissioner v. Woodmen Industries - 2004 (170) E.L.T. A307 (S.C.). Under the circumstances, it is submitted that no penalty is imposable on the firm under the provisions of Rule 26 of the Central Excise Rules, 2002. Without prejudice to the above submission it is also submitted that the penalty of Rs. 2,04,529/- is harsh and exorbitant. No valid and justifiable reasons are forthcoming in the adjudication order for imposing such harsh and unreasonable penalty on each of the Appellans nor any valid reasons are forthcoming in the impugned order for sustaining such penalty. Also, the penalty of equal amount of duty imposed on the Company as well as each of the Appellants herein also shows arbitrary exercise of powers vested in the authority and clear non-application of mind. Thus such harsh and unreasonable penalty cannot be sustained at all and even if penalty is held to be imposable, a reduction in penalty amount is prayed for. (D) JSW Steel Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation cast on the appellant under the law to verify the vehicle details or the numbers. 4. On the other hand, the learned SDR submitted that 5.1 As regards the physical handling of the goods the issue is covered by the Hon'ble CESTAT, WZB, Mumbai's Order reported in 2009 (242) E.L.T. 381 wherein the Hon'ble Tribunal observed as under - 31. Thus, we are of the firm view that Mr. Ketkar cannot be given relief from penalty merely because he did not physically deal with the goods removed clandestinely, without payment of duties. It is noted that the Supreme Court decision in the case of Sitaram Agarwala (supra) was not brought to the notice of the Tribunal while deciding the case of Steel Tubes (supra). In view of this there pleas do not hold goods and the decision of the Hon'ble Tribunal in the case of Steel Tubes relied upon by the counsel, as per incuriam of Hon'ble Apex Court's judgements in the case of Sitaram Agrawal, 1999 (110) E.L.T. 292 (S.C.) and the Tribunal decision. 5.3 With regard to the imposition of penalty on corporate body under Rule 26 of the ibid rules attention may be invited again to the decision of CESTAT, Mumbai Bench in Shrishti Impex Pvt. Ltd. v. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ho are in-charge of its business or are responsible for the conduct of the same, cannot escape liability, unless it is proved by them that the contravention took place without their knowledge or they exercised all due diligence to prevent such contravention. Thus the ratio of Hon'ble Apex Court's judgement in the case of Agrawala Trading Corporation and interpreted by the Hon'ble Tribunal in Shrishti Impex makes explicit that corporate bodies as per are not immune from penalty. [ supplied] With regard to the submission of the counsel of JSW it is clearly coming out form the Show Cause Notice, Order-in-Original and Order-in-Appeal that the success ful bidders were small scale manufactures located in or around Viramgam in Gujarat where as the goods were consigned to M/s. NSPL located in Nashik, in Maharashtra. The truck Nos. mentioned in all the fifteen invoices held the regis tration Nos. of the state of Gujarat and as per RTO regulations the vehicles which are registered in Gujarat can not play between the locations in Maharashtra in other words Gujarat vehicles can load the goods from the State of Gujarat and deliver them on various places in the state of Maharashtra. They c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vered at various destinations at Viramgam, Gujarat. The evidence given by truck owners indicate that the said trucks in fact did not ply between the factory of M/s. JISCO and that of M/s. NSPL. It also evidences that M/s. NSPL did not receive the said 'H R Trimmings Scrap' at their factory at Musalgaon. Tal. Sinnar. It indicates that at the time of clearance, M/s. JSW were supplied with some truck numbers for putting the same on the invoices raised in the name of M/s. NSPL whereas, in reality the said trucks were never used for transportation of the HR Trimmings scrap to M/s. NSPL. It also shows that, M/s. Diamond road ways, situated at 14, Liberty House, Zakaria Masjid Street, Mumbai had manipulated the transport documents and arranged for the diversion of the goods in transit and had managed the transport from the Vashind factory of M/s. JISCO to the actual places of delivery in Gujarat. Thus the submission of M/s. JSW Steel about their innocence do not hold any water. 3. A regards to the plea of jurisdiction taken by M./s. JSW Limited it may be mentioned that M/s. JSW Steel has been penalized under Rule 26 of the Central Excise Rule, 2002 for facilitating M/s. Nashik Strips ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no substance in the argument of the assessee that they were not informed about the amount of the interest to be paid as directed in the OIO. Thus the requirement of Section 11AC(2A) of the Central Excise Act, 1944 for reduction penalty to 25 % has not been complied with. 5. Heard both the sides. 6. I have gone through the submissions made and reliance placed verbally and in their written submissions in detail. After going through I find as follows: (A) Nashik Strips Pvt. Ltd. :- In the case of NSPL the appellant has admitted the wrong availment of Cenvat credit without receiving the goods and paid the duty before issuance of the show cause notice. In that event I confirm duty demand and penalty under Section 11AC against the appellant but appellants are given an option of the reduce penalty to Rs. 25% of the duty confirmed giving the benefit of proviso to Section 11AC if the appellant pays the same within 30 days of the communication of this order failing which the appellant shall pay the 100% of the duty confirmed as laid down in the decisions in the case of K.P. Pouches (P) Ltd. v. Union of India (Supra). (B) K.K. Agarwal Director of M/s. NSPL. :- The only contenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Collector of Customs - 2003 (154) 54 E.L.T. (Bom.) the Hon'ble Bombay High Court in the facts that the goods were discharged at Kandla, and adjudication order also passed at Kandla. As the cause of action took place in the jurisdiction of Gujarat High Court the same cannot be challenged in petition before the Bombay High Court. In that case the Hon'ble High Court of Bombay held that if a part of cause of action has arisen within the jurisdiction of the court than the writ petition can be entertained by the court. In this case also, the invoices were issued by the appellant to M/s. NSPL who obtained the Cenvat Credit on the strength of invoice without receiving the goods at Nashik hence the argument of the learned Advocate are not acceptable. It is held that adjudicating authority was having the jurisdiction In adjudicate the impugned case. Further, the contention of the appellant that the appellant has sold the goods through online process and on ex-factory basis and on ex-factory basis and delivered the goods to the purchasers at factory gate on payment of duty. In this the allegation against the appellant are that the goods against this invoices were never moved. Moreover, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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