TMI Blog2011 (9) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... R JUSTICE SANJAY KISHAN KAUL, MR JUSTICE RAJIV SHAKDHER, JJ. For the Appellant: Mr Mukesh Anand, Advocate For the Respondents: Mr Naveen Mullick, Advocate RAJIV SHAKDHER, J 1. The captioned appeal, which has been filed by the revenue, impugns the order of the Customs Excise Service Tax Appellate Tribunal (hereinafter referred to as the Tribunal ) dated 02.12.2005. The Tribunal has passed a common order in five (5) appeals. Out of the five (5) appeals, four (4) appeals had been preferred by the following entities: i.e., M/s Kandhari Radio Corporation (in short KRC ), M/s Jeet Enterprises (in short Jeet ), M/s Hi-Tech Electrical Industries (in short Hi-Tech ) and M/s Kandhari Separator Industries (in short KSI ). The four (4) appeals filed by them bear numbers E/24-27/02. The fifth (5th) appeal was that of the revenue, which bears the number E/164/02. 2. The appeals before the Tribunal were preferred against a common order dated 24.09.2001, passed by the Commissioner of Central Excise (Appeals) [hereinafter referred to as Commissioner (Appeals) ]. The Commissioner (Appeals) by order dated 24.09.2000 disposed of by a common order two separate appeals against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and imposed penalty equivalent to the duty demanded under the provisions of Section 11AC of the Central Excise Act, 1944 (in short C.E. Act ). Interest under Section 11AB was also levied. Furthermore, personal penalty in the sum of Rs 10,000/- was imposed in all 3/4 cases. The adjudicating authority passed three separate orders-in-original, the details with respect to which are as follows: Name of the party Order-in-original no. date M/s Hi-Tech 85/2000, 13.11.2000 M/s KSI 86/2000, 17.11.2000 M/s Jeet Enterprises 87/2000, 17.11.2000 5. Against the said orders-in-original appeals were filed with the Commissioner (Appeals), details of which are as follows: S. No. Appeal No. Name Address of the Appellant 1 119/2001 M/s Jeet Enterprises, 103, Naraina Industrial Area, Phase-I, New Delhi (hereinafter referred to as the Appellant No. 1) 2 120/2001 Shri Avtar Singh, 103, Naraina Industrial Area, Phase-I, New Delhi (hereinafter referred to as the Appellant No. 2) 3 121/2001 M/s Kandhari Separator Industries, 103, Naraina I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Duty Rate % Total Duty Rs. 3/95 1,16,930/- 30,00,000/- Nil Nil 95-96 47,99,080/- 30,00,000/- 10% 1,79,908/- 96-97 45,22,551/- 30,00,000/- 10% 1,52,255/- 97-98 43,53,523/- 30,00,000/- 03% 40,606/- Total Duty Liability Comes to Rs. 3,72,760/- As the period for which the duty liability arises is the financial years 95-96 to 97-98, penalty under Section 11AC is applicable only for a limited period, i.e., 1996-97 and 1997-98. Although the same came into effect from 28.09.1996, yet the duty demanded for the financial year 1996-97 falls fully within the purview of Section 11AC as the earlier part of the year is covered by the exemption limit. Thus, the penalty under Section 11AC read with Rule 173Q would get reduced substantially. I propose to reduce the said penalty under Section 11AC red with Rule 173Q to Rs 2,25,000/- against a duty liability of Rs 3,72,769/- which is to be deposited individually severally by the units/ partners. (It is noted that for the purposes of mandatory penalty under Section 11AC, the amount of du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmission reliance was placed on the judgment of the Supreme Court in the case of Metal Forgings vs UOI 2002 (146) E.L.T. 241 (SC). The learned counsel also referred to the provisions of Rule 233A of the Central Excise Rules, 1944 to buttress his point that no confiscation of property or imposition of penalty on any person can take place unless a show cause notice was issued and a reasonable opportunity was given of making a representation in writing as to why property ought not to be confiscated or penalty imposed, followed by a hearing in the matter. Learned counsel submitted that since the show cause notice admittedly was not issued, the demand against KRC could not be sustained. 10. Having heard the learned counsels for the parties, we are of the view that in so far as the issue raised in the appeal filed by KRC, that no liability could be fastened on it as a show cause notice was not issued, is an issue which will have to be found in favour of the respondent. The reason is that the provisions of Section 11A of the C.E. Act are mandatory in nature, as held by the Supreme Court in Metal Forging (supra). The relevant observations in this regard are contained in paragraph 10 at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough show cause notice ought to have been served on KRC, the fact that it was not served was saved, by virtue of Avtar Singh being a common thread in respect of the aforementioned entities. The Commissioner (Appeals) thus proceeded to club the clearances of KSI, Jeet and Hi-Tech in the hands of KRC. The Commissioner (Appeals) also directed that since KRC was considered as the manufacturer of the goods in issue, it would get the benefit of the SSI exemption notification number 1/1993. Based on this the duty, for the period March, 1995 to 1998, in the sum of Rs 3,72,760/- was calculated. A penalty was imposed under Section 11AC read with Rule 173Q, in the sum of Rs 2,25,000/- against duty liability of Rs 3,72,760/-. In respect of penalty appellants were held jointly and severally liable. As far as Avtar Singh was concerned, the Commissioner (Appeals) observed that since he was a partner no separate penalty could be imposed on him under Rule 209A. The sum of Rs 50,000/- paid in the form of pre-deposit by Avtar Singh on behalf of KRC was also directed to be adjusted against total duty liability as re-determined by him. In the aforesaid circumstances, it was incumbent on the Tribunal t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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