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Shri H.S. Nataraj, Managing Director M/s. Trishul Arecanut Granuels Private Limited Versus The Commissioner of Central Excise Bangalore II

2016 (5) TMI 673 - KARNATAKA HIGH COURT

Demand of duty and tax penalties - Confiscation in lieu of redemption fine - Seizure of gutkha from the retailer - Available recourse under Section 3-A - Provision of Section 3A was not on the statute book during the subject period of 2002-03 to 2004-05. or upto not even for 2005-06 and came to be inserted only on 10.5.2008 - Held that:- even if Section 3-A is to apply, then also, a further scrutiny may be required to be undertaken as to whether, for the goods in question, the notification was i .....

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accordance with law. Therefore, the impugned order passed by the Tribunal is set aside with a further direction that all Appeal shall stand restored to the Tribunal for its consideration in accordance with law and in the light of the observations made by this Court in the present Judgment. - Appeals allowed by way of remand - CEA NO. 32/2012 C/w CEA No. 14/2012 & CEA Nos. 5-18/2012 - Dated:- 25-2-2016 - MR. JAYANT PATEL AND MRS. S SUJATHA JJ. For the Appellant: Sri M.V. Seshachala, Sr. Counsel .....

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t of respective appeals. 3. We have heard Mr.Seshachala, learned Sr.Counsel appearing with Smt.Vani H and Mr.B.Pramod, Standing Counsel for respondent-Revenue. 4. The factual matrix of the case appears to be that, on June 20, 2005 there was search and seizure in the premises of the appellant, the dealer and some of retailers. On 17.12.2005, the Asst. Commissioner of Central Excise issued show-cause notice proposing to confiscate Gutkha seized from the retailer and demanded duty on the seized goo .....

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imposing penalty of ₹ 50,000/- and redemption fine of ₹ 50,000/-upon the appellant. In the meantime, the appellant also submitted reply to the second show-cause notice on 3.5.2007. The appellant also preferred appeal before the Tribunal against order dated 28.3.2007 vide No.5/07. On 7.12.2007, the Tribunal vide final order No.389/07 remanded the matter to the Original Authority on the ground of observance of the principles of natural justice. 7. On 28.9.2007,the respondent passed an .....

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confirmed. Against the said order dated 28.4.2008, the appellant preferred appeal before the Tribunal. 9. The Tribunal ultimately vide order dated 1.12.2011 disposed of all the appeals and issued following operative directions which read as under: (a) Appeal No.E/69/08 by TAG is disposed of as follow:- (i) Demand of ₹ 9,66,224/- relating to the period 2002-03, demand of ₹ 1,35,28,624/- relating to April 2003 to July 2004 and demand of duty relating to April & May 2005 amounting .....

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ty of ₹ 42 lakhs imposed under Rule 25 of the Central Excise Rules 2002, on TAG is set aside. (b) Appeal No.E/559/08 is disposed of by upholding the confiscation of the goods. The redemption fine of 50,000 is upheld. Penalty of ₹ 50,000/- imposed is also upheld. However, the demand of ₹ 2,85,634/- is set aside for the reasons recorded earlier. (c) Appeal No.E/70/2008 filed by Shri H.S.Nataraj, M.D. of TAG is rejected and the penalty of ₹ 5 lakhs imposed on him is upheld. .....

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eyond the scope of the show cause notice, based on various methods, which were not proposed in the show cause notice as the basis for quantification of duty demanded. b) Whether the Tribunal was right in upholding the penalty imposed on the appellant when the duty demand itself was not legally sustainable. c) Any other question of law arising out of the order passed by the respective authorities may be formulated for consideration. 11. We have heard Mr. M.V.Seshachala, learned Senior Counsel app .....

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.2001. The said Section 3-A again came to be inserted on 10.5.2008 and thereafter has continued. In any case, it is undisputed position that, during subject period, the said provision of Section 3A was not on the statute book during the subject period of 2002-03 to 2004-05. or upto not even for 2005-06 and came to be inserted only on 10.5.2008. 13. It is by now well settled that all taxing statutes are to be strictly interpreted. Further in normal circumstance, when there is conscious omission o .....

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ng Authority for levy of Excise duty on the basis of production capacity or not. However, it appears from the order of the Tribunal that, neither said contention was raised nor considered by the Tribunal in the impugned order. Had it been a mixed question of law and fact, the matter may stand on a different footing and different considerations but, when it is a pure question of law for available recourse under Section 3-A, we find that such a contention is available to the party aggrieved by the .....

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ere is discussion by the Tribunal on the aforesaid aspects which are vital aspects for charging of excise duty, we find that it would be just and proper to remand the matter to the Tribunal for appropriate consideration in accordance with law. 14. Apart from the above aspects, the learned counsel appearing for the appellant has raised two contentions that the figure mentioned in the second show cause notice of demand of duty is not backed by the reasons supplied in support of said show-cause not .....

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sent appeal which is limited to substantial questions of law. 15. As we notice, it is true that such a contention specifically to that extent is unavailable in the order of the Tribunal. However, the contentions so raised is not a mere question of fact but, is a mixed question of law and facts, if the ultimate amount quantified in the show-cause notice goes beyond the reasons recorded or reasons appended to the show-cause notice, and thereafter at the time of confirmation of the demand, the said .....

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amined by this Court, when the contention was not so raised before the Tribunal. However, considering the peculiar circumstances that, as referred to herein above, on the aspects of availability of Section 3-A and on the aspects as to whether goods were so notified for the purpose of charging excise duty, when we have found it properto remand the matter to the Tribunal, we find that it would be just and proper to allow the party to raise the contention even on the aspects of the show-cause notic .....

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