TMI Blog2017 (2) TMI 566X X X X Extracts X X X X X X X X Extracts X X X X ..... 11AC of the Act, 1944 and if it is found that it is not possible to bifurcate the penalty imposable u/s 11AC of the Act, 1944 and Rule 173Q of the Rules, 1944 and/or it is not possible to apportion quantum of penalty imposable u/r 173Q of the Rules, 1944 and/or section 11AC of the Act, 1944, in such a case the matter may be remanded to the appropriate Adjudicating Authority to redetermine the quantum of penalty either u/r 173Q of the Rules, 1944 and/or section 11AC of the Act, 1944, as the case may be. However, to set aside the penalty imposed on the ground that a composite penalty has been imposed under Rule 173Q of the Rules, 1944 and section 11AC of the Act, 1944, shall be giving a premium to the person who has committed the wrong and/or has evaded the duty and/or has contravened the Rules. The consequences in such a case would be that there shall not be any penalty imposed under any of the provisions i.e. either under Rule 173Q of the Rules, 1944 or under Section 11AC of the Act, 1944. The learned CESTAT has materially erred in quashing and setting aside the order of penalty imposed upon the assessee, imposed u/r 173Q of the Rules, 1944 and Section 11AC of the Act, 1944 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 125 pcs. of MMF (P) admeasuring 12,644.25 Mtrs valued at ₹ 2,27,597.00 and 131 pcs. of semi processed man made fabrics admeasuring 13664.50 Mtrs (Grey Mtrs) as detailed in Annexure B C to the panchnama dtd. 20.11.1998 should not be confiscated under Rule 173Q(1) of Central Excise Rules, 1944; (ii) the Central Excise duty amounting to ₹ 21,01,493.00 (BED : ₹ 12,60,896.00 + AED : ₹ 8,40,597.00) leviable on 5,83,748.00 Mtrs of MMF(P) valued at ₹ 1,05,07,465.00, as detailed in Annexure A to the panchnama dated 20.11.1998 should not be demanded and recovered from them under Rule 9(2) of Central Excise Rules, 1944 read with proviso to section 11A( 1) of the Central Excise Act, 1994; (iii) penalty should not be imposed upon them under Rule 173Q( 1) of Central Excise Rules, 1944 read with section 11AC of Central Excise Act, 1944; (iv) the land, building, plant machinery etc. belonging to them or in their possession and used in the manufacture / processing / storage and removal of offending excisable goods i.e. MMF (P) should not be confiscated under Rule 173Q(2) of Central Excise Rules, 1944; v) principles as to presumption of documents as laid dow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Central Excise Act, 1944 (hereinafter referred to as Act, 1944 ) on the assessee as well as the confiscation of land, plant, building and machinery etc. with an option to redeem the same on payment of redemption fine of ₹ 20,000/. [2.6] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned CESTAT quashing and setting aside the penalty imposed under Rule 173Q(1) of the Rules, 1944 read with Section 11AC of the Act, 1944, the Revenue has preferred the present Tax Appeal to consider the following substantial question of law. Whether the CESTAT is empowered not to impose penalty under Rule 173Q of Central Excise Rules, 1944 read with Section 11AC of Central Excise Act, 1944 on the assessee who evaded Central Excise Duty by suppression of facts and in contravention of Rules under Central Excise Law? [3.0] Shri Ankit Shah, learned Counsel appearing on behalf of the appellant Revenue has vehemently submitted that in the facts and circumstances of the case the learned CESTAT has materially erred in quashing and setting aside the penalty imposed upon the respondent Company under Rule 173Q of the Rules, 1944 read with Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , learned Counsel appearing for M/s. Trivedi Gupta, on behalf of the respondent assessee has supported the impugned order passed by the learned CESTAT. [4.1] It is submitted that as composite penalty was imposed both under Rule 173Q of the Rules, 1944 and Section 11AC of the Act, 1944, the learned CESTAT has rightly set aside the composite penalty. [4.2] Shri Bairagra, learned Counsel appearing on behalf of the respondent assessee has heavily relied upon the following decisions of the Hon ble Supreme Court as well as this Court in support of his above submissions that levy of composite penalty under Rule 173Q of the Rules, 1944 and Section 11AC of the Act, 1944, is not permissible. (1) (2000) 3 SCC 131 Collector of Customs vs. Television and Components Ltd. (2) 2003 (158) E.L.T. 711 (Tri. Del.) Lauls Ltd. vs. Commissioner of C. Ex., New Delhi (3) 2009 (234) E.L.T. 215 (Guj.) Commissioner of C. Ex. Customs, SuratII vs. R.G. Agarwal (4) Tax Appeal No.804/2011 Commissioner, Central Excise, Customs Service Tax vs. Bijal Latif Memon Making above submissions and relying upon above decisions, it is requested to dismiss the present Tax Appeal. [5.0] Heard le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the invoice or any other document approved under these rules evidencing the payment of excise duty or the countervailing duty, as the case may be, accompanying thereof, or takes credit of duty or money which he knows or which he has reason to believe, is not permissible under these rules, or does not utilise the inputs or capital goods in the manner provided for in these rules, or utilises credit of duty or money in respect of inputs or capital goods in contravention of any of the provisions of these rules, or does not render proper and true account of the receipt and disposal of the said inputs or capital goods and the credit of duty or money taken thereon as required under these rules, or contravenes any of the provisions contained in Section AA or AAAA of Chapter V of these rules; or (bbb) enters wilfully any wrong or incorrect particulars in the invoice issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of the duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of such goods which is not permissible under these rules; or (c) engages in the manufacture, production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... determined. A penalty under Rule 173Q of the Rules, 1944 is leviable / imposable upon the manufacturer, producer, registered person of a warehouse or a registered dealer. Rule 173Q of the Rules, 1944 provides that subject to the provisions contained in Section 11AC of the Act, 1944, if any manufacturer, producer, registered person of a warehouse or a registered dealer removes any excisable goods in contravention of any of the provisions of the Central Excise Rules, or does not account for any excisable goods manufactured, produced or stored by him....., enters wilfully any wrong or incorrect particulars in the invoice issued for the excisable goods dealt by him with intent to facilitate the buyer to avail of credit of the duty of excise or the additional duty under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of such goods which is not permissible under these rules; or engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or contravenes any of the provisions of these rules with intent to evade payment of duty, then, all such goods shall be liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , to set aside the penalty imposed on the ground that a composite penalty has been imposed under Rule 173Q of the Rules, 1944 and section 11AC of the Act, 1944, shall be giving a premium to the person who has committed the wrong and/or has evaded the duty and/or has contravened the Rules. The consequences in such a case would be that there shall not be any penalty imposed under any of the provisions i.e. either under Rule 173Q of the Rules, 1944 or under Section 11AC of the Act, 1944. Therefore, the proper remedy in such a case would be to remand the matter to the Adjudicating Authority to determine the amount of penalty and/or to determine quantum of penalty either under Rule 173Q of the Rules, 1944, in case the concerned person is manufacturer, producer, registered person of a warehouse or the registered dealer and if it is found that the said person is a person who is not liable to pay the duty as determined under subsection (2) of section 11 of the Act, 1944 and/or under section 11AC of the Act, 1944 if concerned person is found to be liable to pay the duty as determined under subsection (2) of section 11 of the Act, 1944. [5.3] Now, so far as the reliance placed upon the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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