Cce, Allahabad vs M/S Pratappur Sugar & Industries Ltd

(Arising out of the Order-in-Appeal No. 104-CE/ALLD/2009 dated 07/09/2006 passed by the Commissioner (Appeals), Central Excise, Allahabad).

For approval and signature:

Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 26 of 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?

CCE, Allahabad . Appellant

vs.

M/s Pratappur Sugar & Industries Ltd. . Respondent

Appearance:

Shri R.K. Grover, A.R.  for the appellant/Revenue.

None  for the Respondent.

Coram: Honble Mr. Justice G. Raghuram, President

Honble Mr. H.K. Thakur, Technical Member

Final Order No. 52202/2015 dated 09/07/2015

Per. H.K. Thakur :-

This appeal has been filed by the Revenue against OIA No. 104-CE/ ALLD/2006 dated 07/09/2006 under which OIO No. 36 (MP)/2005 dated 16/06/2005, passed by the Adjudicating Authority, has been upheld by the First Appellate Authority. Under OIO dated 16/06/2005 Adjudicating Authority imposed a penalty of Rs. 1,000/- upon the respondent under Rule 13 of the Cenvat Credit Rules, 2002 readwith Rule 25 of the Central Excise Rules, 2002.

2. Shri R.K. Grover (AR) appearing on behalf of the Revenue made the Bench go through the provisions of Rule 13 of the Cenvat Credit Rules, 2002 and Rule 25 of the Central Excise Rules, 2002 to drive home the point that under the provisions of Rule 13 of Cenvat Credit Rules and Rule 25 of Central Excise Rules penalty less than Rs. 10,000/- cannot be imposed. It was, therefore, argued that the order passed by the First Appellate Authority should be set aside and Departmental appeal should be allowed by enhancing the penalty to Rs. 10,000/-.

3. None appeared for hearing on behalf of the respondent. There is also no request for adjournment from the respondent.

4. Heard learned AR and perused the case records. The issue involved in the present proceedings is whether penalty under Rule 13 of the Cenvat Credit Rules, 2002 can be imposed less than Rs. 10,000/-, as imposed by the Adjudicating Authority and upheld by Commissioner (Appeals). For better appreciation of the issue, the provisions of Rule 13 of the Cenvat Credit Rules, 2002 (CCR) and Rule 25 of the Central Excise Rules, 2002 (CER) are reproduced below :-

Rule 13. Confiscation and penalty (1 ) : If any person, takes Cenvat Credit in respect of inputs or capital goods, wrongly or without taking reasonable steps to ensure that appropriate duty on the said inputs or capital goods has been paid as indicated in the document accompanying the inputs or capital goods specified in rule 7, or contravenes any of the provisions of these rules in respect of any inputs or capital goods, then, all such goods shall be liable to confiscation and such person, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed, or ten thousand rupees, whichever is greater.

Rule 25. Confiscation and penalty  (1) : Subject to the provision of Section 11AC of the Act, if any producer, manufacturer, registered person of a warehouse or a registered dealer :-

(a) Removes any excisable goods in contravention of any of the provisions of these rules or the notification issued under these rules; or

(b) does not account for any excisable goods produced or manufactured or stored by him ; or

(c) engages in the manufacture  under section 6 of the act ; or

(d) contravenes any of the  to evade payment of duty.

then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or rupees ten thousand, whichever is greater.

5. From the above provisions of Rule 13 and Rule 25 of CCR and CER respectively it transpires that while imposing penalty the same should not exceed the duty on the excisable goods in respect of which any contravention has been committed or ten thousand rupees, whichever is greater. Accordingly, minimum penalty prescribed under the above provisions is Rs. 10,000/-. Accordingly, it is held that the penalty of Rs. 1,000/-; imposed by the Adjudicating Authority under Rule 13 of the Cenvat Credit Rules, 2002, readwith Rule 25 of the Central Excise Rules, 2002, and upheld by Commissioner (Appeals); was not correct. In view of the above, we set aside the orders passed by the lower authorities and allow the appeal filed by the Revenue by enhancing the penalty to Rs. 10,000/-.

(Operative part of the order pronounced in the open court.)

andl

(Justice G. Raghuram)

President

(H.K. Thakur)

Technical Member

PK

??

??

??

??

4