TMI Blog2006 (3) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... Dr. T. C. Kaushik for the respondent. [Order]- P.C.-1. Heard Mr. Vipin Kumar Jain, the learned counsel for the appellant and Mr.P.S.Jetley, the learned counsel for the revenue. 2. The following substantial question of law arises in this appeal:- Whether the Tribunal was correct in dismissing the appeal without assigning any reason, merely by stating that since the Commissioner (Appeals) has already granted substantial relief, further reduction or setting aside of the penalty is not called for? 3. Admit. 4. Mr. P. S.Jetley, Advocate wavies service for the revenue. 5. The appeal is heard finally at this stage. 6. In challenging the order passed by the Commissioner (Appeals), the present appellant set up the followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ule 173Q (1)(b), could not be invoked in a case where goods were not entered in RG 1 register but were otherwise accounted for out of duty paid raw materials. The Commissioner (Appeals) has also overlooked the appellant's contention that provisions of Rule 173Q (1)(b) 173Q (1)(d) of Central Excise Rules, 1944 could not be invoked until and unless it was established there was an intention to evade payment of duty on the part of the appellant. Appellant submits that there could not be any intention to evade payment of duty on its part inasmuch as the goods which have not been entered in the RG 1 register had been manufactured as per specification of the buyers whose names were mentioned on the packing slip which was seized along with the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her binding precedent to the Division Bench's decision of the Tribunal. Commissioner (Appeals) has erred in preferring the decision of single member bench of the Tribunal over several Division Bench decisions which were cited before the Commissioner (Appeals), all of which in unequivocal terms provide that penalty and the fine under rule 173Q(1)(b) cannot be imposed until and unless there is mens rea on the part of such manufacturer and that the expression "account for" appearing in clause (b) of sub-rule 1 of Rule 173Q meant, to explain 'presence of' and was not synonymous entry in the RG 1 register. Appellant submits that Commissioner (Appeals) has for reasons best known to him preferred to rely upon and take cognizance of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the aforesaid three companies as well as other details such as Foil No., Batch No., sizer and weight of the coils, etc., and that there was no attempt to clear the said goods clandestinely. Commissioner (Appeals) has also overlooked the appellant's contention that finished goods were manufactured as per the specifications placed by the buyers and that such finished goods were custom made for each of its buyers who had placed upon the appellant purchase orders for the said goods, which contained the condition regarding reimbursement of excise duty on actuals. Appellant submits that even though it produced evidence in the form of purchase orders/contract as well as the packing list which were seized during the course of investigation, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that once the Commissioner (Appeals) has concluded that penalty under section 11AC was not imposable, he ought to have set aside the penalty in toto instead of concluding that he could in the alternative impose penalty under rule 173Q, even though the adjudicating authority had penalized the appellant primarily under section 11AC. 9.6 Without prejudice to the above, Commissioner (Appeals) has erred in imposing penalty under Rule 173Q without specifying as to which of the sub-clauses of sub rule 1 of rule 173Q were infringed by the appellant. Appellant submits that it is well settled law that penalty under Rule 173Q(1) cannot be imposed without specifying as to which specific clause of the said sub-rule was infringed by the assessee. Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serious allegation, which the department has to establish on credible and cogent evidence and not merely because there was lack of documentary evidence for one particular entry, it cannot lead to a conclusion that there was shortage, in respect of which credit was deniable. 9.9 Without prejudice to the above, Commissioner (Appeals) has also failed to appreciate that the order for reversal of credit and penalty, under rule 571 as well as for imposition of fine under Rule 173Q of the erstwhile central excise rules is not sustainable inasmuch as the said rules have been substituted by cenvat provisions in terms of Notification 27/2000 CE NT dated 31.3.2000 and that under the new rules, there is saving clause for acts, omissions committed und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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