9911796707
TMI Blog2012 (6) TMI 583X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka Dyeing & Printing Mills Pvt. Ltd. and others and money was advanced to the exporters against these bills. Realization proceeds in respect of these 24 bills was adjusted against money advanced to the exporters by the appellants. With respect to another three bills, the appellant bank sent the bills for collection, the department proceeded against Karnataka Dyeing & Printing Mills Pvt. Ltd. for recovery of deemed Cenvat Credit availed through fraudulent bills. 2.2 A show-cause notice was issued to the appellants for imposition of penalty under Ruel 27 of the Central Excise Act, 2002 for their failure to surrender/credit the sale proceeds of the goods, in spite of notices issued by the department vide letters dated 23/06/2004, 15/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods which had being returned in contravention of the provisions of Central Excise Act and the Rule made thereunder to the Government of India. Hence, they are liable for penalty under Rule 27 of the Central Excise Rules,2002." 2.4 Based on these findings, the Ld. Commissioner imposed a penalty of Rs.5 lakh on the appellant under the provisions of Rule 27 of the Central Excise Rules,2002. 3. The Ld. Counsel appearing for the appellant makes the following submissions: 3.1 In the instant case, as per the directions of the hon'ble High Court of Bombay cited supra, the appellant have to keep the proceeds of the bills in a fixed deposit initially as and when the sale proceeds are received and thereafter renew the deposit until the disposal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out margin in respect of a person who is a man of straw and a person who is non-existent, and all on the basis of a mere letter of guarantee by a person who was not even and income-tax assessee and whose credit worthiness also the Bank was blissfully ignorant of, would all be acts of culpable ignorance and reprehensible imprudence on the part of a banking institution but would fall short of an act or omission rendering the goods liable to confiscation within the meaning of Section 112(a). What the Bank has done, to put it no higher is to fritter away its funds in utter disregard of the banking procedures and rules and regulations and that would not ipso facto make it liable for a penalty under Section 112(a) of the Act. In view of our findi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lpable ignorance and reprehensible imprudence but would fall short of an act or omission rendering the goods liable to confiscation within the meaning of Section 112(a) of the Customs Act. The same logic applies in respect of excise law also. Therefore, the conduct of the bank in discounting export bills or sending the export bills for collection, cannot, in any way, be construed as violation of Central Excise Act or Rules making the goods liable to confiscation. In such an event no penalty can be imposed on the banking company and, accordingly, we find that imposition of penalty under Rule 27 of the Central Excise Rules on the appellant bank is bad in law. Further, we notice that the maximum penalty that can be imposed under the said Rule ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
