TMI Blog2005 (5) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... be upheld for incorrect accounting. The penalties on these two appellants i.e. Shri C.I. Vaghani Shri Satish Kulkarni are to be allowed after setting aside the penalty imposed on them, irrespective of the allegations in the notice sustained or other more. was not admissible as narrated above. He, therefore, has rendered himself liable for penalty under Rule 209A of CER, 1944. The request for cross-examination of the various persons whose statements have been relied upon, to bring on record evidence of one of the varieties of steel was substituted it was imperative to be granted. The denial of cross-examination has resulted in the violation of principles of natural justice to the manufacturer. The Commissioner's finding on this issue as well as the attempt of non-supply of the documents relied upon and required by defence would itself render the order to be set aside on grounds of denial of Natural Justice and remand be called for re-adjudication. Thus, the appeals are allowed. - HON'BLE S.S. SEKHON (T) AND T. ANJANEYULU (J), MEMBERS For the Appellant : Prakash Shah and Jitu Motwani, Advs. For the Respondent : S.S. Bhagat, DR Order S.S. Sekhon, Member (T) 1. M/s. Milton P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r appellant herein in his capacity as Chief of Operations of MPPL as well as Material Manager for all the group of Milton companies, was also looking after the centralised purchase of Steel for the Milton group and therefore he was alleged to have aided and abetted in availing credit which was not otherwise admissible and they were thus liable for penalty under Rule 209A. 4. The Commissioner vide the impugned order found that - (a) The contention of the assessee that the demand issued under the erstwhile Rule 57-I(1)(ii) was legally not valid as the Rules have been substituted with new CENVAT Rule and therefore the proceedings could not continue and even under Section 38A of CEA, 1944 was not acceptable because as regards the continuation of proceedings arising under Modvat scheme; Clause 131 of Finance Act, 2001 has introduced a saving and validating provision in the Act itself by inserting Section 38A. In Clause (c) and (d) rights, privilege, obligation or liability acquired, accrued or incurred under the amended, repealed or superseded or rescinded provision will subsist as if such provision had not been amended, or repealed or superseded or rescinded. Clause 132 of the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n turn also did not mention such details of the stainless steel coils in them invoices issued under Rule 57GG. Therefore, it was not correct to put blame on the department for the mistakes committed by the assessee. (e) From the statement of record of the dealers it is apparent they have stated that they had supplied the SS coils in original packing directly to the units of Milton as instructed and in some cases the material was directly picked up by the parties from the godowns from the dealers and the Assistant Manager admitted that the product cost sheets were prepared at the stage of the launch of the product or once in a year tiffins were always made of Salem grade 304 SS, whereas casseroles were made by SSLN 4 or rolling grade. Such usage been confirmed by the first stage job workers and second stage job workers also. The statement recorded also indicate that there was no documentary evidence to show the use of 304 grade material for casserole. Similar movement of duty paid AS 304 grade (SAIL) and rolling grade stainless steel coils/sheets from registered dealer to first stage job worker is covered under Annexure II Challan for conversion into circles and delivered to second ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the evasion of duty by substituting the duty paying documents of AS-304 grade steel of SAIL rolling grade/other grade of steel in place of AS-304 grade steel of SAIL and as such, they are liable for imposition of penalty under Rule 57-I(4) of CER, 1944. The various decisions referred to by them are distinguished from the present case and their active role has been established in aiding and abetting in the evasion of huge amount of Central Excise duty. 10.17 Shri C.I. Vaghani in his capacity as Managing Director of MPL Director in MPPL was looking after the day to day affairs of MPPK, the job worker for MPL. The wrong availment of Modvat credit took place under the full supervision and management of Shri C.I. Vaghani as he aided and abetted MPPL in availing credit which otherwise was not admissible as narrated above. He, therefore, has rendered himself liable for penalty under Rule 209A of the CER, 1944. 10.18 Shri Satish Kulkarni in his capacity as Chief of Operations of MPPL, Dahisar as well as Material Manager for all the group of Milton companies, was also looking after the centralised purchase of steel for the Milton group has aided and abetted MPPL in availing credit whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this decision it is so mentioned. What is mentioned is that both parties agreed that Finance Bill, 2001 has become the Finance Act, 2001 on 11-5-2001. The Larger Bench has held . As per Section 131 of the Act, a new Section 38A has been introduced with the provision that the same shall be deemed to have been inserted on or from 28th day of February, 1944. The effect of insertion of the said section is to the effect that the repeal of MODVAT provisions w.e.f. 1-4-2000 will not affect the previous operation of the rules and the right, privilege, obligation or liability acquired under the said repealed rules. (iv) A close look at the Notification No. 27/2000-C.E. (N.T.) on 31-3-2000 manifests an intention to enact rules to amend Rules. It would be noticed that new Rule 5 has been substituted for the old Rule 5 and both deals with the credit of duty paid on excisable goods used as inputs or capital goods. In other words amendment is by way of substitution. (v) The word amendment also connotes repeal (Bhagat Ram Sharma v. UOI - AIR 1998 S.C. 740) Para 17 It is a matter of legislative practice to provide while enacting an amendment law, that an existing provision shall be deleted and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of any such provisions in the statute or in the rule the pending proceeding would lapse on the rule under which the notice was issued or proceeding was initiated being deletedomitted. It was in the light of these observations of the Apex Court that Section 38A was inserted in Central Excise Act on 11-5-2001. Section 38A uses the words amendment, repeal, suppression or rescinding whereas Section 6 of General Clauses Act uses the word repeal. Had the Section 38A used the word repeal only at par with Section 6 of General Clauses Act, proceeding could initiated under the old MODVAT rules in view of Supreme Court decision in the case of Kolhapur. But here in Section 38A, the words amendment, repeal, supersession or rescinding have been used. The word substitution would be covered in both amendment as well as repeal. The commentary on Principles of Statutory Interpretation by justice G.P. Singh page 66 is relevant (copy enclosed). In view of above it is felt that word substitution is covered by the words amendment or repeal in Section 38A. We are not able to persuade ourselves to re-consider the decision arrived at in the case of Sunrise Structural Engg. Ltd. - A/711 to 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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