M/S. Meenakshee Fabrics (India) Pvt. ... vs Commr. Of Central Excise , Kolkata-I
- CitationExcise Appeal No. 623/2007
Ratio decidendi
The rule this decision rests on
Where a penalty is imposed under Section 11AC of the Central Excise Act, 1944, the adjudicating authority must extend to the assessee the option of paying 25% of the penalty as the statute provides; a failure to extend that option vitiates the penalty order to that extent, and the matter is to be remanded to the adjudicating authority so that the option can be exercised subject to the prescribed conditions.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of the Order-in-Appeal No.39/Kol-I/07 dated-06/08/2007 passed by the Commissioner (Appeal-I), Central Excise, Kolkata)
For approval and signature of: DR.D.M. MISRA, HONBLE JUDICIAL MEMBER
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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. Meenakshee Fabrics (India) Pvt. Ltd. APPELLANT(S) VERSUS Commr. of Central Excise , Kolkata-I RESPONDENT(S)
APPEARANCE
Sri Tarun Chatterjee, ACS & Ms. Ambika Sarkar, C.S. FOR APPELLANT(S) Sri A. Roy, Supdt. (A.R.) FOR THE RESPONDENT(S)
CORAM: DR.D.M. MISRA, HONBLE JUDICIAL MEMBER
DATE OF HEARING & DECISION : 05/06/2015
ORDER NO : FO/A/75423/15
This appeal is filed against Order-in-Appeal No.39/Kol-I/07 dated-06/08/2007.
2. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of excisable goods viz. Knitted Crocheted Process Fabrics (Cotton Cloth and unprocessed Knitted Fabrics) falling under Chapter 60002.93 of CETA,1985. They had availed total CENVAT Credit of Rs.6,44,296; Rs.1,63,964/- on the specified raw materials and finished goods lying in stock as on 31/3/2003 in terms of Notification No. 35/2003-CE (NT) dated-10.04.2003, as amended; credit on additional duty of excise amounting to Rs.4,78,314/- on inputs viz. cotton yarn during the period of May, 2003 to July, 2004 and on National Calamity Contingent Duty (NCCD) amounting to Rs.2,018/-. A demand notice dated 29/11/2005 was issued for recovery of the said CENVAT Credit to the tune of Rs.6,44,296/- invoking extended period of limitation. The demand has been adjudicated and confirmed by the Joint Commissioner of Central Excise who besides confirming the said demand, imposed penalty of Rs.6,44,296/- under Section 11AC and directed interest in terms of Section 11AB of CEA, 1944. Aggrieved by the said order, the appellant has preferred an appeal before the Ld. Commissioner (Appeals). After considering the submissions, the Ld. Commissioner (Appeals) has allowed the Transitional CENVAT Credit of Rs.1,63,964/- but upheld the demand of Rs.4,80,332/- and penalty of equivalent amount under Section 11AC and interest under Sec. 11AB of CEA,1944. Hence, the present appeal.
3. Ld. Advocate for the Appellant has not disputed the confirmation of recovery of CENVAT credit and interest in the impugned Order. However, he has submitted that the authorities below had not extended the option to pay 25% of the penalty, statutorily allowed under Section 11AC of CEA, 1944, resulting into gross injustice to them as the demanded amount of Rs.6,44,296/- against the confirmed amount of Rs.4,80,332/- had already been paid by them between 31/3/2005 to 17/06/2005. In support, he has referred to the decision of the Honble Gujrat High Court in the case of Chandan Steel Ltd. Vs. Commr. of C. Ex., Vapi reported in 2015 (316) ELT 573 (Guj.)
4. Ld. A.R. for the Revenue has fairly accepted that the authorities below have not allowed the appellant to exercise their option for payment of 25% of the penalty imposed.
5. Heard both sides and perused the records. I find that while imposing the penalty under Sec.11AC of CEA,1944 the choice to pay 25% of the penalty as prescribed under Section 11AC of CEA, 1944, has not been extended to the Appellant. In view of the judgment of the Honble Gujrat High Court in the case of Chandan Steel Ltd. Vs. Commr. of Central Excise & Service Tax, Vapi reported in 2015 (316) E.L.T. 573 (Guj.). the appellant ought to have been given an opportunity to exercise their option to pay 25% of the penalty in view of the provisions contained in the Section 11AC of CEA, 1944. In the result, the impugned order is set aside to the extent of not allowing to exercise option under Section 11AC for payment of 25% of the penalty and the matter is remanded to the adjudicating authority with the consent of both sides so as to allow the appellant to exercise their option to discharge 25% of the penalty imposed as laid down under Section 11AC of CEA, 1944 subject to fulfilment of the prescribed conditions. The appeal is disposed off on the above terms.
(Dictated & Pronounced in the open Court) Sd/- 10/08/2015 (D.M. MISRA) MEMBER (JUDICIAL)
k.b/-
Excise Appeal No. 623/2007 4
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