M/S. Saraswathy Agency vs Cce, Puducherry

(Arising out of Order-in-Appeal No.109/2010 (P-ST) dated 1.6.2010 passed by the Commissioner of Central Excise (Appeals), Chennai)

M/s. Saraswathy Agency Appellant

Vs.

CCE, Puducherry Respondent

Appearance

Shri V. Ravindran, Advocate, for the Appellant Shri R. Subramaniyam, AC (AR) for the Respondent

CORAM

Honble Shri D.N. Panda, Judicial Member

Date of Hearing / Decision: 16.06.2015

Final Order No. 40636 / 2015

Heard both sides and perused the records.

2. Appellants contention is that the adjudication order which had granted concession to the appellant was not served on the appellant on 18.3.2009 at all. Therefore, it obtained a copy of the order from the adjudicating authority on 21.12.2009 and exercised the option to discharge penalty of 25% of tax liability by 31.12.2009. Adjudicating authority has also recorded that substantial amount of the demand was discharged before issuance of the show-cause notice which is clear from para 12(ii) of the adjudication order. Appellant has also discharged interest liability as required by law. The authority for no reason imposed penalty under section 78 of the Finance Act, 1994 while granting concession of 25% of the tax demand to be discharged as penalty.

3. Revenue supports order of learned Commissioner (Appeals).

4. The only controversy in this appeal is whether concession in penalty to the extent of 25% of the tax liability discharged before the appellate authority disposed the appeal is deniable when such concession was allowed by adjudication order. Learned counsel submits that due to delay in service of the adjudication order, which was received by it on 21.12.2009, the appellant discharged tax liability as well as concessional penalty by 31.12.2009. But the department alleges that the concessional penalty was not discharged by 17.4.2009 since the adjudication order was dispatched on 18.3.2009.

5. The appellate authority has co-existence and co-terminus power. If the appellant has shown its bonafide in discharging substantial amount of the demand prior to issuance of show-cause notice, learned Commissioner (Appeals) he had also power to extend concession in penalty to be discharged within 30 days from the date of receipt of this order.

6. Department has not verified as to on whom the adjudication order was served. Mere dispatch of the order may not result in inference that it was served on the appellant. It should be addressed to the right addressee. There is no finding to that effect. Had the department verified the address of the addressee from envelope containing the order and caused an inquiry, truth would have been discovered to reach to a conclusion that the envelope containing the adjudication order was served on the assessee. In absence of any inquiry, appellant gets benefit of doubt of the service of the order upon it not earlier to 21.12.2009. When the order came to the knowledge of assessee, upon service, the crucial date for it to discharge penalty was 21.12.2009 and 30 days therefrom was to be reckoned.

7. As stated above, in absence of any inquiry about the service of the adjudication order on the appellant and as to whether the envelope was rightly addressed it was left open to the appellate authority to grant same concession of 25% of penalty what that was extended by adjudicating authority.

8. In view of the above material facts and evidence on record, to reduce litigation and also considering discharge of tax liability which is not in dispute by Revenue, penalty is reduced to 25% of tax liability which is also said to have been discharged by the appellant and not controverted by Revenue, appeal is allowed. Consequential relief if any shall flow in accordance with law.

(Dictated and pronounced in open court)

(D.N. Panda) Judicial Member

Rex

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