M/S. Asha Telecom P Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 97-98-CE/APPL/DLH-IV/44&45 /2012 dated 19.11.2012 passed by Commissioner of Central Excise (Appeals), Delhi IV]

For approval and signature:

Honble Mr 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. Asha Telecom P Ltd. Appellants

Shri Pawan Verma

Vs.

Commissioner of Central Excise Respondent

Delhi IV

Appearance:

Shri N K Sharma, Advocate for the Appellants

Shri Ranjana Jha, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 12.1.2015

FINAL ORDER NOS. A/ 50139-50140 /2015-Ex(SM)

Per Ashok Jindal :

Appellant is in appeal against the impugned order wherein mandatory penalty under section 11AC of the Act has been confirmed against them.

2. The brief facts of the case are that on 18.3.2010, the investigation was conducted at the factory of the appellant and shortage of inputs was found. The appellant explained the shortage as due to rusty inputs they sold the rusty inputs in the market without payment of duty. In these circumstances, a show cause notice dated 28.2.11 was issued to the appellant to appropriate duty on the inputs cleared without payment of duty and also proposing interest and levy of penalty. The show cause notice was adjudicated and demand of duty confirmed and appropriated and demand of interest was also confirmed and penalty equal to the duty involved was also imposed on the appellant under section 11AC of the Act. On appeal before the Commissioner (Appeals), the adjudication order was confirmed. Aggrieved from the said order, appellant is before me.

3. Learned counsel for the appellant submits that initially, investigating was conducted in their factory on 10.4.2009, a show cause notice was issued by invoking extended period of limitation and the said case was adjudicated and duty demand was paid by them. Therefore, subsequent show cause notice cannot be issued by invoking extended period of limitation, therefore, penalty on the appellant is not imposable. He further submits that Revenue has failed to allege to whom the appellant has sold the goods and the date of removal of the goods. Therefore, penalty is not imposable. He further submits that the entire amount of duty has been paid before issuance of show cause notice, theretofore, penalty is not imposable as held by Honble High Court in the case of Rituraj Pipes & Plastics Pvt. Ltd. [2008 (232) ELT A 26 (Raj)]. Therefore, it is prayed that the impugned order imposing penalty is to be set aside.

4. On the other hand, learned AR opposed the contention of the learned Counsel and submits that show cause notice dated 10.4.09 was issued to the appellant on some other grounds, not for shortage of inputs. Moreover, in this case, the appellant has admitted the shortage of inputs and clearance thereof without payment of duty, therefore extended period of limitation has been rightly invoked by the lower authorities. She further submits that in this case the appellant has paid only duty and not the interest before issuance of show cause notice. Therefore, penalty has rightly been imposed. She further submits that it is not required for the Revenue to find out as to whom the goods were sold and when the sale of goods has been admitted by the appellant that they have cleared the inputs without payment of duty. In these circumstances, it is prayed that impugned order is to be upheld.

5. Heard the parties. Considered the submissions.

6. In this case, I find that it is the admission by the appellant that they have cleared inputs without payment of duty which resulted in shortage of inputs at the time of investigation on 18.3.2010. It is also a fact on record that on 10.4.09 when the investigation was done, that was in relation to the shortage of inputs. In these circumstances, I hold that extended period of limitation is rightly invoked.

7. Further I find that when there is an admission of removal of inputs without payment of duty and that fact came in the knowledge of Revenue during the course of investigation. Therefore, the extended period of limitation is rightly invoked. Further, I find that appellant has paid only duty and not interest, hence as per the provisions of section 11 AC of the Act, appellants are required to pay penalty equivalent to duty. I also find that appellant has relied upon the decision of Rajasthan High Court in the case of Rituraj Pipes & Plastics Pvt. Ltd. (supra). The facts of the said decision are not relevant to the facts of this case as in that case there was shortage of inputs which was found during the course of investigation but in this case apart from the shortage of inputs, it is admission on the part of the appellant that they have cleared the inputs without payment of duty. In these circumstances, I do not find any infirmity in the impugned order. The appeals filed by the appellants are dismissed.

(dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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