Benaka Electronics Unit vs Commissioner Of Central Excise And ...

[Arising out of Order-in-Appeal No. 2-2008 dated 21/01/2008 passed by CCE(Appeals-II), Bangalore]

For approval and signature:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

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?

BENAKA ELECTRONICS UNIT-1 NO.13, WEST OF CHORD ROAD, 4TH CROSS, INDUSTRIAL TOWN, RAJAJINAGAR, BANGALORE Appellant(s)

Versus

Commissioner of Central Excise And Service Tax BANGALORE-III NULL PB.NO.5400...QUEENS ROAD, CENTRAL REVENUES BUILDING, BANGALORE, - 560001 KARNATAKA Respondent(s)

Appearance:

Shri Sathya Vageeswaran, Advocate For the Appellant

Dr. A.K. Nigam, Addl. Commissioner(AR) For the Respondent

Date of Hearing: 13/02/2015

Date of Decision: 13/02/2015

CORAM:

HON'BLE SMT. ARCHANA WADHWA, JUDICIAL MEMBER

Final Order No. 20872 / 2015

Per : ARCHANA WADHWA

The challenge in the present appeal is to penalty of Rs.10,000/- imposed by the lower authorities in terms of the provisions of Rule 25 of Central Excise Rules.

2. The appellant is manufacturer of electronic goods which are exported by them without payment of duty under bond/letter of undertaking. The appellant executed a letter of undertaking on 25/11/2004 which was accepted by the Assistant Commissioner. The appellants cleared the goods under the said letter of undertaking upto 30/03/2007.

3. However they received a show-cause notice on 14/05/2007 alleging that the said bond was valid only for 12 calendar months from the date of execution of the bond and as such the validity of the said bond expired on 24/11/2005. A fresh bond was executed by the appellant only on 13/04/2007 and as such during the intervening period, there was contravention of provisions of Rule 19 of Central excise Rules, 2002. Accordingly penalty was proposed which came to be levied as Rs.10,000/- under the provisions of Rule 25 of Central Excise Rules.

4. The appellants contention is that Rule 19 nowhere prescribes that the bond executed by an assessee would be only for a period of 12 calendar months. The Revenue has referred to some Boards instructions for restricting the validity of the bond for 12 calendar months. In terms of the various Boards instructions, the Assistant Commissioner is not required to discharge the bond without satisfying himself of the due export of the goods. Even if the bond was to expire after 12 months, it was equally the duty of their jurisdictional officers to discharge the earlier bond and direct the assessee to execute a new bond.

5. After appreciating the submissions made by the appellant and after going through the impugned order, I find that the penalty stands imposed upon the appellant on a hyper technical ground. No time limit stand expressed in the bond or in the provisions of Rule 19. If as an administrative instruction, the bond has to be restricted to a period of 12 months, the jurisdictional officers of the appellant were well within their rights to direct the appellant to execute a new bond. Not only they did not do so but on the contrary they also allowed the assessee to keep on exporting the goods as against the executed bond. In such a scenario, it cannot be said that there was any malafide on the part of the appellant not to renew the bond in time, so as to call for the penal provisions. Accordingly I set aside the penalty of Rs.10,000/- imposed upon the appellant and allow the appeal with consequential relief, if any, to the appellant.

(Pronounced in court)

ARCHANA WADHWA JUDICIAL MEMBER Raja.

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