M/S Kansal Texo Tube Pvt Ltd vs Commissioner Of Central Excise, ...

[ Arising out of OIA-RS/16-17/SRT-II/2007 dtd 29.1.2007 Passed by Commissioner (Appeals), Central Excise, CUSTOMS (Adjudication)-SURAT ]

1. M/s Kansal Texo Tube Pvt Ltd - Appellant(s)

2. Shri Gajanand Surajbhan Agarwal

Vs

Commissioner of Central Excise, CUSTOMS (Adjudication)-SURAT- - Respondent (s)

Represented by :

For Assessee : Shri W Christian, Advocate For Revenue : Shri G P Thomas, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical)

1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

No 3 Whether their Lordships wish to see the fair copy of the Order?

Seen 4 Whether Order is to be circulated to the Departmental authorities?

Yes

CORAM :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 9/4/2015

ORDER No. A/10664-10667/2015 dated 09.04.2015

Per : Mr.P.K. Das,

These appeals are arising out of a common order and therefore all are taken up together for disposal.

2. The appellants a 100% EOU engaged in the manufacture of Twisted Yarn. On 4.5.1999, the Preventive Officers of Headquarter during the verification of stock found shortage of duty free imported material. After thorough investigation, it was noticed that the duty free imported material was used in the manufacture of finished products and cleared in DTA. The Adjudicating Authority confirmed the demand of Central Excise duty of Rs 6,30,258/- alongwith interest and imposed penalty of equal amount. It has also confirmed the demand of Customs duty of Rs 2,68,910/- on raw materials consumed in the finished goods cleared by the appellant. It has also confiscated the goods, which are not available for seizure and imposed redemption fine of Rs 1,00,000/-. Penalty of Rs 60,000/- and Rs 26,000/- was imposed on Shri Gajanad S Agarwal, Director of the Company under Central Excise Act and customs Act respectively. The Commissioner (Appeals) modified the adjudication order to the extent redemption fine was reduced to Rs 50,000/-.

3. The Learned Advocate fairly submits that they are not disputing the demand of Central Excise duty alongwith interest, which they have already paid. He submits that as they have already deposited the entire amount of duty, they are entitled to pay the penalty 25% of the duty as per provisions of section 11AC of the Central Excise Act 1944. He further submits that the goods are not available for confiscation and therefore confiscation and imposition of redemption fine are not warranted. He relied upon the decision of the Larger Bench of the Tribunal in the case of Shiv Kripa Ispat Pvt Ltd Vs CCE, Nasik  2009.235.ELT.623 (Tri. LB). It is submitted that the demand of customs duty on the raw material used in the manufacture of final product, can not be sustained as the Central Excise duty on finished goods has already been confirmed. He relied upon the decision of the Tribunal in the case of CCE, Surat Vs. Sanjari Twisters  2009.235.ELT.116 (Tri. Ahmd) which was upheld by the Supreme Court. On the other hand the Learned Authorised Representative for the Revenue reiterate the findings of the Commissioner (Appeals).

4. After hearing both the sides and on perusal of the records, we find force in the submissions of the learned Advocate. It is noticed that the Adjudicating Authority has not given option for payment of the penalty of 25% of the duty along with entire duty and interest within 30 days from the date of receipt of Adjudication order as per Section 11AC of Central Excise Act, 1944. The High Court of Gujarat in the case of CCE, Surat Vs Rajshree Mill Pvt Ltd  2014.305.ELT.442 Guj. held that the assessee is entitled to get an option for payment of reduction of penalty 25% of duty within 30 days from the date of receipt of Adjudication order, by the Adjudicating Authority. Regarding the other issue, the Larger Bench of the Tribunal in the case of Shiv Kripa Ispat Pvt Ltd (supra) held that if the goods are not available for seizure, confiscation and redemption amount cannot be sustained. Regarding the demand of Customs duty on the raw material used in the manufacture of final products, we find that the Adjudicating Authority had also confirmed demand of Central Excise duty on the finished product, which has been paid by the appellant. The Tribunal in the case of Sanjay Twisters (supra) rejected the appeal of the Revenue on the identical issue and held that duty demanded on duty free imported raw material by availing the exemption notification used in final product, cleared in DTA and demand of Central Excise duty was raised, Customs duty on raw material cannot be sustained. Regarding the imposition of penalty on the Director, it is noticed that separate penalties were imposed under the Customs Act and Central Excise Act, which cannot be sustained.

7. In view of the above discussion, we modify the impugned order in so far as the demand of Customs duty alongwith interest and penalty under the Customs Act are set aside. The confiscation of the goods which is not available and imposition of redemption fine are also set aside. Penalty imposed under the Customs Act on the Director is set aside. Regarding the penalty imposed under the Central Excise Act on the Appellant Company, we allow option to pay the penalty of 25% of the duty alongwith entire amount of duty and interest within 30 days from the communication of this order. Otherwise, the appellant is liable to pay penalty of entire amount of duty. Both the Appeals are disposed of in the above terms.

(Dictated and pronounced in the Court)

(H.K. Thakur) (P.K. Das) Member (Technical) Member (Judicial)

swami

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