TMI Blog2024 (3) TMI 636X X X X Extracts X X X X X X X X Extracts X X X X ..... eces, as appearing in the RG-I Register is the same as appearing in the Central Excise Invoice No 16 and 18, both dated 20.04.2001. In view of the above revenue authorities have totally failed to adduce evidence to show that appellant had cleared 44 pieces against these invoices. The order for confirming the demand by taking 44 number as appearing in RG-1 register as complete credenza/ storage cabinets is contrary to the facts on record and no effort has been made to ascertain true facts by making any enquiry/ investigation at the customer end. There are no merits in this demand. Demand of Rs 90,720/- for the goods alleged to be cleared to Sita Resorts on the basis of the proforma invoices - HELD THAT:- It is not placed on record through any tangible evidence to show that the goods were cleared against these proforma invoices. Even Shri Soni has in his statement stated so. Two more statements of Shri Soni were subsequently recorded and no question on these clearances was put to him. Appellant had asked for the cros s examination of Shri Soni which was also not allowed. Impugned order records that allowing/ non-allowing of Cross Examination is the discretion of the Adjudicating Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned order. Penalty on Appellant 2 and Appellant 3 - HELD THAT:- No active role played by the appellant 2 and appellant 3 in respect of the evasion/ short payment of duty to the extent upheld by me, by the Appellant 1. Hence there are no position to uphold the penalties imposed upon Appellant 2 and Appellant 3 under Rule 209A of the Central Excise Rules, 1944. Appeal allowed in part. - HON BLE MR. SANJIV SRIVASTAVA, MEMBER ( TECHNICAL ) Shri Naveen Mullick, Advocate for the Appellants Shri Manish Raj, Authorised Representative for the Respondent ORDER SANJIV SRIVASTAVA : These appeals are directed against order in appeal No 180-182/CE/APPL/NOIDA/2012 dated 28.06.2012 of the Commissioner (Appeals) Customs, Central Excise and Service Tax Noida. By the impugned order following has been held: ORDER (i) I, hereby, uphold the confirmation of demand of Central Excise duty amounting to Rs. 8,26,886/-along with applicable rate of interest. (ii) I, hereby uphold the order of appropriation of Rs.59,360/- which has been paid by the appellant-1 vide TR-6 Challan No. 20 dt. 13.09.01 (iii) I, hereby, uphold the penalty of Rs.8,26,886/- imposed upon appellant-1 under section 11AC (iv) I, also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year exceeded Rs 300 lacs; (iii) An amount of Rs 56,360/- paid vide TR-6 challan dated 13.09.2001, should not be adjusted against the total amount of duty payable by them; (iv) Penalty should not be imposed on them under Rule 173Q of the erstwhile Central Excise Rules, 1944; (v) Penalty equivalent to the duty payable under the proviso to the section 11A(1) of the Central Excise Act, 1944 should not be imposed under section 11AC of the Act; and (vi) Interest at appropriate rate, on the duty payable should not be recovered from them under Section 11AB. B. Appellant 2 and Appellant 3 to show cause as to why penalty should not be imposed on them under Rue 209A of the erstwhile Central Excise Rules, 1944. 2.3 The show cause notice was adjudicated as per order in original No 10/ADC/2006 dated 20.06.2006 confirming the duty demanded along with imposition of penalty equivalent to duty confirmed on Appellant 1. A penalty of Rs 5,00,000/- was imposed on the Appellant 2 and Appellant 3. 2.4 Aggrieved appellants preferred an appeal to the Commissioner (Appeal), who vide his order in appeal no 38-40/Central Excise/APPL/NOIDA/08 dated 25.02.2008, remanded the matter back to original authority fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 Returns even for this period and were clearing their goods at Concessional Rate of Duty. Therefore, it cannot be said that they had suppressed any facts with the intent to evade the Payment of Central Excise Duty Reliance is placed on the following decisions: Chemphar Drugs and Liniments [1989 (40) ELT 276 (SC)]. Continental Foundation Jt. Venture [2007 (216) ELT 177 (SC)]. Kartik Engg. [Pvt. Ltd., 2014 (308) ELT 550 (T.)]. Ms KEC International Ltd. [2012 (283) ELT 428 (T.)] Tin Plate Company of India Ltd. [2010 (256) ELT 595 (T.)] Penalty imposed of Rs. 8,26,886/- under section 11AC of the Central Excise Act is not sustainable Imposition of penalty of Rs 1,00,000/- on M/S Continental Furnishres Shri Sanjiv Lamba, Managing Director and CEO of M/S Continental Furnishers under Rule 209A is liable to be set aside. Reliance is placed on the decision in case of Ballarpur Industries Ltd, [2007 (215) ELT 489(SC)]. 3.3 Arguing for the revenue learned authorized representative reiterates the findings recorded in the impugned order. 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of arguments. 4.2 Impugned order records following fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation, while remanding the Matter. I observe that no such specific order was given by the than Commissioner (Appeals), and it is discretion of the adjudicating authority to allow the cross examination of the concerned person. It is also observed that the appellant-1 failed to provide the necessary evidence in respect of their claim that only 34 no. were supplied instead of 38 as mentioned in the proforma invoice and supported by the statement of Sri D.L.Soni. Accordingly I uphold the confirmation of duty amounting to Rs. 90,720/- 4.5 Regarding the value of work station the appellant contented that as per panchnama dated 4.9.2001 the value of work station is only Rs. 2,04,500/- and not Rs,4,39,500/-. There is also no whisper as to how and on what basis the value has been calculated and worked out in the panchnama. On perusal of the panchnama, I observe that value of goods found in the factory / office/ showroom/canteen of the appellant is mentioned in the annexure-B of the panchnama and same was duly signed by the representative of the appellant. The said figure of the panchnama was never retracted by the appellant. Hence I do not find any merit in the contention of the appellant i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s where any of the ingredients specified under the proviso to Section 11A(1)of Central Excise Act, 1944 is present, In my view, if any of such ingredients is present in a case, then the action for recovery of the duty short paid/ not paid can be taken within 5 years of the relevant date irrespective of the fact as to when the fact of short payment/ nonpayment of duty comes in the notice of the Department. This is so because nowhere has it been mentioned in Section 11A that the Department is required to take action for recovery of the duty evaded immediately after the evasion comes to the knowledge of the Department. In the instant case, there is no doubt about the fact that appellant-1 evaded payment of duty. The offence of evasion committed by them is not diluted because the fact of evasion had been reflected in the RT-12 returns filed by them . I also fully agree with case laws relied upon in this regard by the adjudicating authority Thus, I uphold the confirmation of duty amounting to Rs. 5, 59,158.49 4.7 Regarding appropriation of duty already deposited, I observe that duty deposited by the appellant-1 was liable to be adjusted against the demand of duty confirmed against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very act of the company affecting the performance of the company has the tacit approval of the M.D/CEO. Therefore I agree with the findings of the adjudicating authority that it can be said that he was very much instrumental in removal of excisable goods without payment of duty. Further, being most responsible person, he was aware of the consequences which could follow after clandestine removal of excisable goods. In other words, it can be said that he was aware of the fact that such goods could be confiscated. There is no doubt about the fact that he actively dealt with such goods . Accordingly, I uphold that the imposition of penalty upon the appellant-3 under rule 209A of the Central Excise Rules, 1944. 4.3 Original authority has recorded following findings in the order in original for confirming the demand against the Appellant 1 and for imposing the penalties on all the three Appellants. Annexure C-3 : Duty Demand -Rs. 5,00,641.52/-: Period 2.9.2000 to April 2001. Clearances effected without payment of duty. 13.1 . 13.3 . S.No 3 of Annexure-C-3 is concerned, I observe that SIPL have not explained the circumstances as to how the figure was shown as 10 5 in the invoice No. 16 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and hence the department was kept aware about the value of clearance being effected from time to time and that even for the year 2001-2002 the fact of availing concessional rate of duty under notification no. 9/2001was being reflected in the RT-12 returns. As per them, the whole of the demand has been issued beyond normal period of one year and hence the same is barred by limitation as there has been no suppression or mis-declaration in availing benefit of notification no. 9/2001 during the year 2001-2002 14.2 I have considered the submissions made by them. I find that they have not contested the case on merits. Therefore, it can be said that there is no dispute about the fact that the value of clearances effected during 2000-01 exceeded Rupees three crores. There is also no dispute about the fact that SIPL were very well aware that they were not eligible for SSI exemption during 2001-02 for the aforesaid reason. The only dispute is whether, the Central Excise duty which had not been paid by wrongly availing the SSI exemption, is recoverable from them by invoking extended period or not. As to this dispute, I am of the considered view that extended period can be invoked for demand o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, it was contended on behalf of the Department that the aforesaid correspondences clearly showed that, on the dates of sales/ clearances of goods from the factory, the fact of charging higher duty from the customers was suppressed from the Department and once the fact is suppressed regarding the correct valuation of the goods, the Department is entitled to avail the longer period of limitation of five years irrespective of the fact that such suppression had come to the knowledge of the Department subsequently because that knowledge would not dilute the limitation already available to the Department in view of the clearance of the goods suppressed fact. Having considered the on submissions of the both sides,the Hon‟ble Tribunal did not accept the contention made on behalf of the party and made the following observations: In other words, if there is any suppression of fact at the time of clearances of the goods and duty has been short paid on account of such a suppression by an assessee the Department can demand the duty so short levied or short paid within a period of five years from the date of payment i.e the date of clearances of such goods (emphasis supplied) 14.4 The H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the knowledge of the Department, they were required to fulfill obligations under the Central Excise law. The ratio of the aforesaid decision is applicable to the instant case in letter and sprit inasmuch SIPL were working not only under Self-Remova Procedure Scheme (SRP) but also under the Self Assessment Scheme and tremendous faith had been reposed in them for proper classification, valuation and determination of Central excise duty. SIPL have not brought on record any evidence- whether documentary or circumstantial- to show that the omissions and commissions made by them in this case have taken place under bona fide belief and that they had no intent to evade payment of duty. 14.9 In view of the discussion and findings, as aforesaid, I hold that they had wrongly availed SSI exemption and thereby evaded payment of Central Excise duty amounting to Rs.5,59,158.49 and the same is recoverable from them under the proviso to Section 11A (1) of Central Excise Act, 1944 by invoking extended period of limitation. 15.1 The facts and circumstances, as discussed in the foregoing paras show that SIPL have contravened, with intent to evade payment of duty, the following rules of Central Exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words, it can be said that he was aware of the fact that such goods could be confiscated. There is no doubt about the fact that he actively dealt with such goods. For the aforesaid reasons. therefore, I hold that he has rendered himself liable for penalty under rule 209A of the Central Excise Rules, 1944 18. Against the allegation as aforesaid , the third Noticee i.e. Continental have submitted that they had been purchasing the goods on the strength of a regular invoice and that it is wrong to allege that they assisted and abetted in evasion of duty by SIPL. I observe that for imposition of penalty under rule 209A, what is required is that the person/entity on which penalty is proposed is found to have dealt with the goods which are liable to confiscation and such person/entity knew or had reason to believe about the said fact. As discussed in the foregoing paras, Shri Lamba was CEO of Continental. Therefore, it can be said that Continental was aware through Shri Lamba about the nature of the goods manufactured by SIPL and dealt with by Continental. In other words, it can be said that Continental was aware of the fact that the offending goods received by them from SIPL were liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 22,900/- Total 45893/- Less Discount of 10% 4589/- Add 7% other charges 2891/- Invoice Value 44,195/- Total Invoice Value of 16 18 1,46,997/- It is contended by the appellant that these invoices are in respect of the goods supplied to against order received for supply of Credenza and Storage Cabinets. These goods are initially manufactured in the factory of the appellants, in parts and accounted for in the RG-1 register as parts, the figure of 44 pieces is reflected in RG-1 Register. On assembling at site of by putting together these 44 pieces, brings into existence the Credenza and Storage Cabinets. Central Excise Invoice No 16 dated 20.04.2001 only consisted of 3 types of parts. While Invoice no 18 dated 20.04.2001 consisted of about 34 parts removed in 5 packages and being sufficient to bring into existence of 5 number of Storage Cabinets as an immovable structure at the site of HFCL. The Central Excise Invoices referred to the description for which order was placed on the appellants giving the number of complete credenza/ storage cabinets supplied by the appellant. To ascertain the correctness of the claim no enquiries were conducted from HFCL in respect of the alleged discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as per the following decisions. Basudev Garg [2013 (294) ELT 353 (DEL.)] J K Cigarrettes Ltd.[2009 (242) ELT 189 (DEL.)] Andaman Timber Industries [2015 (324) ELT 641 (SC)] Intermetal Trade Ltd. [2014 (308) ELT 481 (T)] 4.7 Demand of Rs 70,320/- towards the goods lying within the factory as per the panchnama: Undisputedly as contended by the appellant it is settled position in law that the central excise duty is to be paid only at the time of clearance of the goods from the factory. Admittedly in the present case the panchnama dated 04.09.2001 records as follows: The officers also conducted the verification of stock physically, lying in the premises. It was noticed that the company had manufactured and installed office furniture in their office canteen premises and Shri D L Soni, Manager (Excise) informed that the same was not entered in the RG 1 register of the company and they have not paid any duty on them. The details of stock verification are listed in Annexure B to this Panchnama. The value of goods mentioned in Annexure B was ascertained from Shri Partha Pratim Gosh, Coordinating Architect. The facts as recorded in the Panchnama are not disputed. The fact that appellants ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case. The Tribunal came to the conclusion that the facts referred to hereinbefore do not warrant any inference of fraud. The assessee declared the goods on the basis of their belief of the interpretation of the provisions of the law that the exempted goods were no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considered these aspects correctly. Contrary to the factual position, the CEGAT has held that no plea was taken about there being no intention to evade payment of duty as the same was to be reimbursed by the buyer. In fact such a plea was clearly taken. The factual scenario clearly goes to show that there was scope for entertaining doubt, and taking a particular stand which rules out application of Section 11A of the Act. Thus I do not find any merits in this demand by invoking the extended period of limitation as per proviso to section 11A (1). 4.9 On the imposition of penalty Penalty on Appellant 1: In view of the fact that against the total demand of Rs.8,26,886/- which has been upheld by impugned order, I am not in position to the demand beyond Rs 70,320/-. Accordingly penalty under Section 11AC imposed on the Appellant is reduced to Rs 70,320/- from Rs 8,26,886/- imposed by the original authority and affirmed by the impugned order. Penalty on Appellant 2 and Appellant 3 From the facts as discussed in previous para I do not find any active role played by the appellant 2 and appellant 3 in respect of the evasion/ short payment of duty to the extent upheld by me, by the Appella ..... 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