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TMI Blog2018 (3) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... er detected that the appellant had not maintained the raw material register after 1.7.2009 and the finished goods register from 19.7.2009 till the date of visit of the officers. On the basis of investigation, the department recorded the statement from Shri Sunil Kedia, Director of the assessee appellant and prepared Panchnama on the spot. The excess stock of finished goods found available in the factory were seized. Subsequently, the department initiated show cause proceedings against the appellants for confiscation of the goods and for imposition of penalties. The matter was adjudicated vide order dated 9.1.2012, wherein the finished goods viz. ordinary Portland cement and clinker valued at Rs. 15,49,820/- were confiscated, with the option to redeem the same on payment of redemption fine of Rs. 8 lakhs. Further, the adjudication order also imposed penalty of Rs. 4 lakhs under Rule 25 (1) of Central Excise Rules, 1994 on the assessee appellant and Rs. 4 lakhs on Shri Sunil Kedia, Director of the assessee appellant under Rule 26 of the Rules. The ld. Commissioner (Appeals) vide the impugned order has upheld the adjudged demand confirmed against the appellant. Hence, the appellants h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, I am surprised as to how the authorities below have recorded such fact, which is not emanating from the statement recorded by the officers of the department on the spot from the Director of the company. I also find that the authorities below have not recorded any findings with regard to the certificate dated 12.4.2010, furnished by the Chartered Accountant regarding the availability of stock as on 31.7.2009 and the submissions regarding the illness of the maternal uncle of the Director. In absence of any credible evidence regarding the intention to remove the goods in clandestine manner, I am of the view that imposition of redemption fine and penalties cannot be sustained in the eyes of law. 7. With regard to confiscation of excisable goods and imposition of fine/penalty under Rule 25 ibid, the law is well settled that in absence of the ingredients like suppression, or wilful mis-statement as provided under Section 11AC of the Central Excise Act, 1994, the provisions of Rule 25 ibid cannot be invoked. In this context, the Hon'ble Gujarat High Court, in the case of Saurashtra Cement Ltd. (supra), while setting aside the penalty imposed under Rule 25 ibid have held as follows: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a finding of the Tribunal that the circumstances were beyond the control of the respondent-company as the matter was pending before BIFR, and as such, the amounts could not be deposited by the respondent-company within time and as soon as it was in a position to make the payment, the respondent-company made the payment not only of the duty, but also the interest calculated under Rule 8(3) of the Rules. The Court, therefore, come to the conclusion that the Tribunal has correctly interpreted Rule 25 of the Rules and the penalty cannot be imposed on the assessee company. 19. A similar issue has come up before the Kerala High Court in the case of Superintendent of Central Excise v. Sance Pharmaceuticals (supra). The Court in that case was concerned with issuance of show-cause notice and levy of penalty under Rule 173GG of erstwhile Central Excise Rules, 1944. The Division Bench of the Kerala High Court while confirming the order and judgment of the learned single judge, setting aside the penalty, has held that the learned single judge has correctly applied the law laid down by the Apex Court that penalty should not be imposed in absence of willful intention to evade payment of tax or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in that section. The Court further held that Section 11AC would not apply to every case of non-payment or short payment of duty regardless of the conditions expressly mentioned in the section for its application. 22. It is also relevant to mention here that applicability of Rule 25 is subject to the provisions of Section 11AC of the Act. The term "subject to" in the context assumes some importance. The Apex Court in the case of Commissioner of Ce. Ex., Bhavnagar v. Saurashtra Chemicals Limited, 2007 (212) E.L.T. 7 (S.C), after referring to its earlier decisions observed that the term "subject to" is an expression whereby limitation is expressed. It is further observed that the expression "subject to" must be given effect to. 23. In K.R.C.S. Balakrishna Chetty and Sons & Co. v. The State of Madras, AIR 1961 SC 1152, the Apex Court took the view that on a proper interpretation of Section 5 of Madras General Sales Tax Act, 1939, the expression "subject to" only means that the exemption under the licence is conditional upon the observance of the conditions pres ..... X X X X Extracts X X X X X X X X Extracts X X X X
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