M/S Zen Polymers vs Commissioners Of Central Excise

[ Arising out of OIA-161-162/2007/COMMR-A-/RAJ dtd 26.7.2007 passed by Commissioners of Central Excise, Customs and Service Tax-RAJKOT ]

M/s Zen Polymers - Appellant(s)

Vs

Commissioners of Central Excise, Customs and Service Tax-RAJKOT - Respondent (s)

Represented by For Assessee : Shri R Subramanya, Advocate For Revenue : Shri J Nair, Authorised Representative

For approval and signature :

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

Date of Hearing / Decision : 21/9/2015

ORDER No. A/11523 / 2015 dtd 21/9/2015

Per : Mr.P.K. Das,

The appellant were engaged in the manufacture of PVC Pipes classifiable under heading No 3917.00 of the Schedule to the Central Excuse Tariff Act 1985 and availed SSI exemption under Notification No 8/2003-CE dtd 1.3.2003 as amended. On 10.3.2006, the Central Excise Officers visited and searched the factory premises of the appellants. It was noticed that the appellant availed the exemption benefit on the finished goods bearing brand name of the other persons. The appellant paid an amount of Rs 4,22,969/- at the instance of Central Excise officers. Thereafter, show cause notice was issued proposing demand of duty alongwith interest and to impose penalty. The Adjudicating authority confirmed the demand of Central Excise duty of Rs 3,75,552/- alongwith interest and imposed penalty of equal amount of duty, for the period 2003-04 and 2004-05. It has also imposed penalty of Rs 35,000/- on the partner of the appellant firm under Rule 26 of the Central Excise Rule 2002. By the impugned order, the Commissioner (Appeals) upheld the adjudication order against the appellant and reduced the penalty of Rs 10,000/- imposed on the partner of the appellant firm.

2. After hearing both the sides and on perusal of the records, we find that the main contention of the Learned Advocate is that the appellants factory is situated in rural area and therefore they are eligible to avail the SSI exemption even on the finished goods cleared bearing the brand name of other persons. On a query from the Bench, the Learned Advocate fairly submits that the certificate of Gram Panchayat was not produced before the lower authorities. They have now submitted copy of the certificate before the Tribunal. However, considering the duty amount involved and the appellant already deposited the duty amount alongwith interest, the Learned Advocate submits that the penalty is liable to set aside. The Learned Advocate is not contesting the demand of duty alongwith interest as they have already paid at the instance of the Central Excise Officers before issuance of show cause notice. It is also contended that they are eligible to avail the benefit of exemption Notification on the basis of the Gram Panchayat certificate, which was not placed before the lower authorities. Thus, there is no material available that the appellant had intention to evade payment of duty. So, the penalty under Section 11AC of the Central Excise Act, 1944 of exemption of duty is not justified.

3. We find that the appellant is not disputing duty alongwith interest, the amount of penalty should be reduced. Accordingly, the impugned order is modified in so far as the demand of duty alongwith interest is upheld and the penalty is reduced to Rs 25,000/-. The appeal filed by the appellant is disposed of in the above terms.

(Dictated and pronounced in the Court)

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

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