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M/s. IG Petrochemicals Ltd. Versus The Commissioner of Central Excise & Customs, Belapur.

2016 (8) TMI 84 - BOMBAY HIGH COURT

Levy of penalty - deliberate omission or not - Held that:- The Tribunal has assigned cogent and satisfactory reasons. The reasons are that appellants imported capital goods and they were so imported without payment of customs duty. These goods went in manufacture and export of excisable goods. There were also certain materials procured indigenously without payment of duty at the time of de-bonding. These forgone duties were capable of being recovered and were recovered. However, the investigatio .....

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APPEAL NO. 25 OF 2015 - Dated:- 6-6-2016 - S.C. DHARMADHIKARI AND DR.SHALINI PHANSALKAR-JOSHI JJ Mr. Karan Adik with Mr. Hussein Bengali i/b M/s. Jayakar & Partners for the Appellant. Mr. A.S. Rao with Mr. Jitendra B. Mishra for the Respondent. ORDER: 1. This appeal by the assessee challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal dated 7th August, 2014. By the order under challenge, the Tribunal dismissed the appeal of the appellants and confirmed a deman .....

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itation by the appellant itself in writing so as to enable the Departmental officials to come and inspect the records and verify and scrutinize the same. 3. Thirdly and importantly what the Tribunal has failed to notice is that there was a clear argument of any lack of mens rea or deliberate or intentional act on the part of the appellants to evade customs duty. The appellants had cleared other capital goods imported by it under the EPCG Scheme on payment of concessional duty and had intended to .....

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goods and equally exported them. They applied for setting up another plant for manufacture and export of the product and they were granted permission. They commenced commercial production in the year 2000-2001 in which year they were granted a status as Star Export House by the Central Government. Thereafter, the appellants invoked clause 6.18 of the Foreign Trade Policy 2004-2009 and sought to de-bond from its 100% EOU status. The appellants addressed a letter to the Development Commissioner da .....

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on the capital goods procured by them duty free as a export oriented unit after taking into consideration the depreciated value vis-a-vis the fulfilled conditions for achieving that status. 7. Reliance is placed on certain letters addressed to the Assistant Commissioner of Customs and Excise. 8. After all these procedures were complied with, what the appellants are aggrieved by is the fact that they were called upon in terms of certain audit objections and report to show cause as to why the issu .....

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944, were not attracted. 10. However, the order-in-original, contrary to this, proceeds to levy and impose penalty and which the Tribunal has confirmed. 11. Having perused the Tribunal's order, we find that the essential controversy has been noted and correctly. The appellants did not challenge the demands that were confirmed under the Customs Act and the Central Excise Act. Upon a composite show cause notice and the letters being addressed to the Assistant Commissioner of Central Excise and .....

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sue raised. In dealing with all this, the Tribunal found that the appellants did not give a complete list of capital goods which were procured without payment of duty and the items, including generating set. Now, it is impossible to assume that an item such as a generating set or a generator could be left out and without any intent or purpose. The omission, therefore, was found to be deliberate. It is only during the audit that the conduct of the appellant came to notice and that is why the misd .....

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ion reveals that the complete list of capital goods is not procured or not handed over at the time of de-bonding. It is only when the further steps were taken that the Department / Revenue noticed these serious lapses. Once the nature of the capital goods enabled the adjudicating authority and the Tribunal to arrive at a finding of fact that this was a deliberate or intentional act that we do not think that the appeal raises any substantial questions of law. 13. We do not find any substance in t .....

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. vs. Commissioner of Central Excise, Raipur reported in 2013 (288) ELT 161 (SC), is entirely misplaced. There the controversy was as to whether section 28 of the Customs Act, 1962, is attracted only because of any non payment of duties or there is something more which would enable the Revenue to invoke the extended period of limitation. The Legislature having employed certain words and with specific intent that the Hon'ble Supreme Court concluded that mere non payment of duties is not equiv .....

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s of the present case. This is not a case of any doubt being entertained by the Department or the assessee and that is why the act complained of is not deliberate or intentional. In the circumstances of the present case, the intentional and deliberate act is established and proved. 16. In the case of Commissioner of Central Excise, Thane-II vs. Bright Brothers Ltd. reported in 2015 (322) ELT 110 (Bom), the issue was entirely different. The expression shall also be liable to pay penalty equal to .....

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Locomotive Company Limited. The activities are referred to in paragraph 8 of the Division Bench judgment. The allegations in the show cause notice are also clearly indicated. In that the moulds developed by M/s. TELCO are the sole property of the assessee. That was reflected as assets in their books of account. Hence there is no question of taking the amortised cost with the assessable value of the moulded parts of plastic moulds by the assessee to M/s. TELCO. The reply thereto was also conside .....

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ed on the assessable value. It is in these circumstances and when there were two views which were brought to the notice of this Court, that it was observed that mere amortising the cost of mould does not tantamount to misrepresentation and misstatement of facts. The willful and deliberate act must be established and that would precede the mandatory imposition of penalty. Such a finding being absent that this Court upheld the order of the Tribunal. We do not see how reliance can be placed on this .....

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