M/S. Surya Ceramics vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIO-27/COMMISSIONER/2007 dated 30.10.2007, passed by Commissioner Central Excise & Service Tax, Rajkot )

M/s. Surya Ceramics : Appellant (s)

VERSUS

Commissioner of Central Excise & S.T., Rajkot : Respondent (s)

and

Appeal No. : E/211,212/2008

(Arising out of OIO-27/COMMR/2007 dated 30.10.2007 & OIO-28/COMMR/2007 dated 31.10.2007, passed by Commissioner Central Excise & Service Tax, Rajkot )

Commissioner of Central Excise & S.T., Rajkot : Appellant (s)

VERSUS

M/s. Surya Ceramics : Respondent (s) M/s. Fine Ceramics

Represented by :

For Appellant (s) : Shri Hardik Modh, Advocate For Respondent (s) : Shri Alok Srivastava, Authorised Representative

For approval and signature :

Mr. P.K. Das, Hon'ble Member (Judicial) Mr. P.M. Saleem, Hon'ble 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. P.M. Saleem, Hon'ble Member (Technical)

Date of Hearing / Decision : 23.09.2015

ORDER No. A/11341-11343/2015 Dated 23.09.2015

Per : Mr. P.K. Das;

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

2. After hearing both the sides and on perusal of record, we find that both the assessees were engaged in the manufacture of Ceramic Tiles. Proceedings were initiated for demand of duty alongwith interest and imposition of penalty on the ground of undervaluation of the goods. The matter went up to the Tribunal. The Tribunal upheld the allegation of undervaluation and remanded the matter to the adjudicating authority for quantification of demand alongwith interest and imposition of penalty. By the impugned orders, the adjudicating authority confirmed the demand of duty alongwith interest and also imposed penalty of Rs. 4,50,000/- and Rs. 4,00,000/- against M/s. Surya Ceramics and M/s. Fine Ceramics, respectively. M/s. Surya Cermaics filed appeal against the demand of duty and penalty. Revenue filed appeals against both the assessees for imposition of penalty of equal amount of duty under Section 11AC of the Central Excise Act, 1944.

3. The learned Advocate appearing on behalf of the appellants submits that M/s. Surya Ceramics filed appeal against demand of duty along with interest and penalty. He fairly submits that as per instructions from M/s. Surya Ceramics, they are not contesting the demand of duty alongwith interest. They are contesting only imposition of penalty in both the cases.

4. On the other hand, the learned Authorised Representative on behalf of Revenue submits that it is well settled that the adjudicating authority has no discretion to reduce the penalty amount of equal amount of duty, under Section 11AC of the Central Excise Act, 1944. It is also submitted that the adjudicating authority should have imposed separate penalty under Rule 173Q of the erstwhile Central Excise Rules, 1944 as it stood during the relevant period.

5. As the assessee is not contesting the demand of duty along with interest in the case of M/s. Surya Ceramics, there is no need to discuss the merits of the case. Regarding the appeals filed by the Revenue to impose the amount of penalty of equal amount of duty, under Section 11AC of the Central Excise Act, 1944, we agree with the submissions of the learned Authorised Representative for the Revenue. It is well settled by the decision of the Honble Supreme Court that there is no discretion for reduction of mandatory penalty. Hence, it is required to impose penalty of equal amount of duty, under Section 11AC of the Act.

6. As the penalty was imposed under Section 11AC of the Act, we do not find that there is any requirement of impose penalty under Rule 173Q of the erstwhile Central Excise Rules. So, the contention of the learned Authorised Representative on this issue cannot be accepted. The assessee should be allowed to pay penalty 25% of the duty alongwith entire amount of duty and interest, within 30days from the communication of this order under Section 11AC.

7. In view of the above discussion, the appeals filed by the Revenue are allowed to the extent the penalty imposed under Section 11AC is enhanced to equal amount of duty. The assessees are entitled to pay the penalty 25% of the duty alongwith entire amount of duty and interest within 30 days from the date of communication of this order. Learned Advocate submits that their appeal may be dismissed as withdrawn. Accordingly the appeal filed by the assessee is dismissed as withdrawn.

(Dictated and pronounced in the Court)

(P.M. Saleem) (P.K. Das) Member (Technical) Member (Judicial) ..KL

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