Ankit Goel Managing Director vs Cce, Delhi-I

[Arising out of Order-in-Appeal No.40-41/ CE/DLH/2014 passed by the Commissioner (Appeals), Central Excise, New Delhi]

For approval and signature:

HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

1. Whether Press reporters may be allowed to see the

order for publication as per Rule 27 of the CESTAT

(Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the

CESTAT (Procedure) Rules, 1982 for publication in

any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy

of the Order?

4. Whether Order is to be circulated to the Departmental

authorities?

__________________________________________________

Space Telelink Ltd.,

Ankit Goel Managing Director Appellant

Vs.

CCE, Delhi-I  Respondent

Present for the Appellant : Shri V.P. Sethi, Advocate

Present for the Respondent: Shri G.R. Singh, DR

Coram: HONBLE MR. S.K. MOHANTY, MEMBER (JUDICIAL)

Date of Hearing/Decision: 10.06.2015

Final ORDER NO. 53308-53309/2015

PER: S.K. MOHANTY

The brief facts of the case are as under:-

For the month of April 2012, the appellant had reflected the Central Excise Duty liability of Rs. Rs.12,06,743/- in its ER-1 return. Out of the said declared duty liability, the appellant had paid Rs.7,06,743/- within the stipulated time frame prescribed in Rule 8 (1) of the Central Excise Rules, 2002 and the balance amount of Rs.5,00,000/- was paid through PLA on 08.09.2012 alongwith applicable rate of interest. For non-payment of the Central Excise Duty liability within the stipulated time frame, the Department initiated show cause proceedings for recovery of entire duty in terms of Rule 8 (3A) of the said rules, which culminated in the adjudication order dated 30.10.2013, in confirming the proposed duty demand. The appeal filed against the adjudication order was disposed of vide the impugned order dated 11.04.20014, wherein duty demand against the appellant company was upheld and penalty imposed on the Managing Director was reduced from Rs.4,50,000/- to Rs.1,37,129/-. Being aggrieved with the said impugned order, the appellant has filed this appeal before the Tribunal.

2. The ld. Advocate Shri V.R. Sethi appearing for the appellant submits that the phrase without utilizing cenvat credit appearing in sub-rule (3A) of Rule 8 was declared invalid by the Honble Gujarat High Court in the case of Indsur Global Ltd. vs. Union of India reported in 2014 (310) ELT 833 (Guj.). According to the ld. Advocate, the effect of said sub-rule after deletion of the above phrase is to the effect that the cenvat credit can be utilized for payment of excise duty for each consignment at the time of removal. According to him, since as per the requirement of the said sub-rule, the appellant had discharged the excise duty liability by debiting its cenvat account for clearance of each consignment from the factory, the requirement of the said rule has been duly complied with, and as such, there was no necessity for confirmation of demand.

3. Per contra, Shri G.R. Singh, the ld. DR appearing for the Revenue reiterates the findings recorded in the impugned order.

4. Heard the ld. Counsel for both sides and perused the records.

5. I find force in the submission of the ld. Advocate for the appellant that in view of deletion of the phrase without utilizing the cenvat credit in sub-rule (3A) of Rule 8, the outcome is that excise duty can be paid for each consignment at the time of removal by utilizing the cenvat credit. Since the duty liability has been discharged by the appellant on each and every clearance of the finished product from the factory by utilizing cenvat credit, such payment is in conformity with the above statutory provisions. Thus, confirmation of the duty demand by the authorities below is not in agreement with the statutory mandate.

6. Imposition of penalty under Rule 25 of the Central Excise Rules read with section 11 AC of the Central Excise Act 1944 has no application in the present case, inasmuch as, non-payment of duty as prescribed in Rule 8 (3A) of the Central Excise Rules, 2002 is not attributable to suppression, wilful misstatement or contravention of any of the provisions of the Rules, with intent to evade payment of duty. Hence, I am of the considered view that imposition of penalty under Rule 25 by the lower authorities is not legal and proper. In this context, I find support from the judgement of Honble Gujarat High Court delivered in the case of CCE vs. Saurashtra Cement Ltd., reported in 2010 (260) ELT 71 (Guj.).

7. However, considering the fact that the duty attributable to removal of excisable goods has not been paid by the appellant within the stipulated time, I am of the view that the provisions of Central Excise Rules, 2002 have been violated, for which penalty can be imposed under Rule 27 of the rules. Accordingly, penalty imposed in the adjudication order and confirmed in the impugned order are set aside and the same is restricted to Rs.5,000/- under Rule 27 of the rules.

8. Since there is no element of mensrea in the present case, imposition of penalty on the Director of the company is not justified and accordingly, the impugned order confirming the penalty amount on the Directors is set aside.

9. The appeals are disposed of in above terms.

(Dictated and pronounced in the open Court)

(S.K. MOHANTY)

MEMBER (JUDICIAL)

Anita

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