M/S. Anuvrat Products & Co vs C.C.E. & S.T. Raipur
- CitationAppeal No. E/50184/2014-EX(SM)
Ratio decidendi
The rule this decision rests on
Where a penalty under section 11AC of the Central Excise Act, 1944 is founded on an alleged contravention of Rules 6 and 8 of the Chewing Tobacco and Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules, 2010, the penalty cannot stand where the assessee has not contravened those rules, and the show cause notice itself records that the assessee packed manually with labour and paid duty under section 3 of the Act and filed regular returns. A penalty order that relies on a panchnama drawn up after the date of the show cause notice has no relevance to the penalty proposed in that notice, and an order resting on such material is liable to be set aside.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
[Arising out of Order-in-Original No. 301/RPR-I/2013 dated 21.08.2013 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Raipur].
For approval and signature:
Honble Shri Ashok Jindal, 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?
M/s. Anuvrat Products & Co. .Appellants
Vs.
C.C.E. & S.T. Raipur .Respondent
Appearance:
Shri P.V. Sadavarte, Advocate for the Appellants
Shri D. Singh, DR for the Respondent
CORAM:
Hon'ble Shri Ashok Jindal, Member (Judicial)
Date of Hearing: 09.04.2015
FINAL ORDER NO. 51422/2015-EX(SM)
Per Ashok Jindal:
The appellant is in appeal against the impugned order imposing mandatory penalty under section 11AC of Central Excise Act 1944.
2. The facts of the case are that the appellant is a manufacturer of chewing tobacco and unmanufactured tobacco. They were working under compound levy scheme and paying duty under Chewing Tobacco and Unmanufactured Tobacco Packing Machine (Capacity Determination and Collection of Duty) Rules 2010. During the period September 2010 and August 2010 the appellant sought the sealing of their packing machines of tobacco and same has been done. But during this period appellant was engaged in manually with the aid of laborers and packing of pouches of tobacco and same has been intimated to the Department and was paying duty under Section 3 of the Central Excise Act 1944 and filing their regular returns. A show cause notice was issued on 26.09.2011 to impose penalty on the appellant for contravention of rule 6 & 8 of the said rules. Consequently, to impose penalty under Section 11 AC of the Act the Adjudicating Authority dropped the proceedings to the show cause notice on appeal by the Revenue. The Ld. Commissioner (A) set aside the order of adjudication and imposed the penalty as proposed in the show cause notice.
3. The Ld. Counsel for the appellant submits that the appellant has not violated any Rules of the said rules. Therefore, penalty under section 11 AC is not imposable. He drew my attention to the impugned order wherein the Ld. Commissioner (A) has relied on the panchnama dated 30.03.2012 whereas show cause notice has been issued on 26.09.2011 to impose penalty. Therefore, the said order deserves no merits and hence same is to be set aside.
4. On the other hand Ld. AR oppose the contention of the Ld. Counsel and submits that during the impugned period the appellant was using the sealing machine for packing tobacco pouches and same is evident from the order of Commissioner (A). He further submits that appellant has violated the provision of Chewing Tobacco and Unmanufactured Tobacco Packing Machine Rules 2010. Therefore, penalty is rightly imposed on them. He specifically drew my attention to the explanation of the Rules to say that although the appellant is not using packing machine but same is to be deemed as they are working with the aid of packing machine.
5. Heard the parties. Considered the submission.
6. In the impugned order the Ld. Commissioner (A) has relied on the Panchnama dated 30.03.2012. Admittedly, the show cause notice has been issued on 26.09.2011. Therefore, the Panchnama dated 30.03.2012 have no relevance to impose penalty on the appellant in this case. Further, I find that in show cause notice itself it is recorded that appellant was engaged manually with laborers for packing the tobacco pouches and paying Central Excise duty under section 3 of the Central Excise Act 1944 and filing their returns regularly. In these circumstances, the impugned order deserves no merits. Accordingly, same is set aside and by holding that no penalty is imposable on the appellant as appellant has not violated the provisions of Rule 6/8 of the Chewing Tobacco And Unmanufactured Tobacco Rules (Capacity determination and Collection of Duty) Rules.
7. With these terms impugned order is set aside. Appeal is allowed.
(Dictated and pronounced in the open court)
(Ashok Jindal) Member (Judicial)
Bhanu
3
E/50184/2014-EX(SM)
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