M/S Rishabhdev Techocable Ltd vs Commissioner, Central Excise & Service ...

Appeal No.E/453,454/2009; E/Extn/14670-14671/2014 [Arising out of OIA No.KKS/507-508/DAMAN/2008, dt.10.12.2008, passed by Commissioner (Appeals), Central Excise & Service Tax, Daman]

1. M/s Rishabhdev Techocable Ltd. 2. Shri Kamal Golecha Appellants

Vs

Commissioner, Central Excise & Service Tax, Daman Respondent

Represented by:

For Appellant: Shri P.M. Dave, Advocate For Respondent: Shri Jitendra Nair, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial)

1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

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

3. Whether their Lordships wish to see the fair copy of Seen the order?

4. Whether order is to be circulated to the Departmental Yes authorities?

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL)

Date of Hearing/Decision:27.03.2015

Order No. A/10293-10294 / 2015, dt.27.03.2015

Per: P.K. Das

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

2. The relevant facts of the case, in brief, are that M/s Rishabhdev Techocable Ltd was engaged in the manufacture of Electric Cable Wires, classifiable under Chapter 85 of the Schedule to Central Excise Tariff Act, 1985. The Central Excise Officers visited the Appellants factory on 09.01.2007 and seized some documents. The Appellants paid an amount of Rs.39,12,845.00 at the instance of the Central Excise Officers. A Show Cause Notice dt.04.03.2008 was issued, proposing demand of duty along with interest and to impose penalty on the Appellants. After the receipt of the Show Cause Notice, the Appellant paid the balance amount of demand of duty as proposed in the Show Cause Notice in order to avoid legal complicity. The Adjudicating authority confirmed the demand of duty of Rs.41,16,128.00, which was paid by the Appellant and appropriated in the Adjudication order. There is a further demand of Rs.6,06,315.00, which was also paid by the Appellant and appropriated in the Adjudication order. The Adjudicating authority also confiscated the goods and as the goods were not available for confiscation, imposed the redemption fine of Rs.26 lakhs and imposed penalty of equal amount of duty on the Appellant No.1 and a personal penalty of Rs.10 lakhs on Shri Kamal Golecha Director of the Appellant No.1 Company. Commissioner (Appeals) upheld the Adjudication order.

3. The learned Advocate appearing on behalf of the Appellants fairly submits that the Appellants already paid the entire amount of duty before passing the Adjudication order, in order to avoid further litigation. They are not contesting the demand of duty. He submits that the Adjudicating authority should have given the option of payment of 25% of duty as per the provisions of Section 11AC of Central Excise Act, 1944. He further submits that the penalty imposed on the Director of the Appellant company would not be sustained on the ground that the penalty under Section 11AC was imposed on the Appellant company. He relied upon the decision of the Tribunal in the case of M/s Sonam Clock Pvt. Ltd Vs Commissioner of Central Excise, Rajkot  2012 (278) ELT 263 (Tri-Ahmd). He further submits that the penalty on the co-noticee should be dropped. He further submits that that the goods are not available and therefore, the confiscation is bad in law and imposition of redemption fine cannot be sustained. He relied upon the following decisions:-

a) M/s Shiv Kripa Ispat Pvt Ltd Vs Commr. of C. Excise, Nasik 2009 (235) ELT 627 (Tri-LB)

b) M/s Munjal Showa Ltd Vs Commr. of C. Excise, Faridabad 2008 (227) ELT 330 (Tri-Del.)

4. Learned Authorised Representative for the Revenue submits that the penalty on the Director is sustainable as he is involved in the clandestine removal of the goods. He relied upon the decision of the Tribunal in the case of CCE Kanpur Vs M/s Ess Jay Poly Film (P) Ltd - 2010 (249) ELT 575 (Tri-Del).

5. After considering the submissions of both the sides and on perusal of the records, I find that the Appellants are not contesting the demand of duty. They have also paid the duty before issue of the Adjudication order. Honble Gujarat High Court in the case of M/s Exotic Associates Vs Commissioner of Central Excise  2010 (252) ELT 49 (Guj.), held that the benefit of reduced penalty under Section 11AC of the Central Excise Act, 1944 would be given if the option was not given to the Appellant earlier. I agree with the submissions of the learned Advocate that the goods are not available and therefore, confiscation and imposition of redemption fine are not sustainable. The Larger Bench of the Tribunal in the case of M/s Shiv Kripa Ispat Pvt. Ltd (supra) held that the goods cannot be confiscated when not available, redemption fine is not imposable.

6. Regarding the penalty on the Director of the Appellant Company, I find that both the sides cited the case laws in their favour. In any event, I agree with the learned Advocate that the quantum of penalty on the Director is excessive, when Section 11AC was invoked on the Appellant Company.

7. In view of the above discussion, the impugned order is modified in so far as the demand of duty along with interest and penalty of equal amount is upheld. However, as the Adjudicating authority has not given option to pay the penalty of 25% of the duty under Section 11AC of the said Act, the option is given to the assessee to pay the penalty 25% of duty, and the entire amount of duty alongwith interest within 30 days from the date of receipt of the order, failure to which, the Appellant would pay the penalty equal the amount of duty. The penalty on the Appellant No.2 is reduced to Rs.50,000.00 (Rupees Fifty Thousands only). The confiscation and imposition of redemption fine are set aside.

8. The applicant filed applications for extension of stay order which are dismissed as infructuous.

(Dictated & Pronounced in Court)

(P.K. Das) Member (Judicial)

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