Shri Kaluram Ramdayal Heda vs Commissioner Of Central Excise & S.T., ...

(Arising out of OIA-68-69/2011/COMMR-A-/CMC/RAJ dated 30.03.2011, Passed by Commissioner (Appeals) Central Excise, & S.T., Rajkot)

Shri Kaluram Ramdayal Heda : Appellant (s)

VERSUS

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

Represented by :

For Appellant (s) : Shri P.V. Sheth, Advocate For Respondent (s) : Shri Lalatendu Patra, Authorised Representative

For approval and signature :

Mr. H.K. Thakur, 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?

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. H.K. Thakur, Honble Member (Technical)

Date of Hearing / Decision : 10.03.2015

ORDER No. A/10215 / 2015 Dated 10.03.2015

Per : Mr. H.K. Thakur;

This appeal has been filed by the appellant against Order-in-Appeal No. 68-69/2011/COMMR-A-/CMC/RAJ dated 30.03.2011 under which a penalty of Rs. 2 Lakh imposed upon the appellant by the adjudicating authority was upheld.

2. Shri P.V. Sheth (Advocate) appearing on behalf of the appellant argued that penalty of Rs. Two lakh has been imposed upon the appellant under Rule 26 of the Central Excise Rules, 2002. It was his case that appellant has supplied certain raw materials to the manufacturers M/s. J.M. Copper Rajkot either on bills or without bills. That penalty under Rule 26 of the Central Excise Rules, 2002 can not be imposed for the clandestine activities made by the manufacturer to whom the appellant supplied the raw materials.

3. Learned Advocate relied upon the following case laws:-

(a) Ashok Joshi vs. CCE Jaipur  [2003 (157) ELT 304 (Tri. Del.)]

(b) R.S. Makkar vs. CCE, Surat  [2014 (312) ELT 427 Tri. Ahmd.)]

4. Shri Lalatendu Patra (AR) appearing on behalf of the Revenue argued that for imposing penalty under Rule 26 of the Central Excise Rules, 2002, it is not necessary that the person should have dealt with the excisable goods when appellant has supplied the raw materials to the manufacturer M/s. J.M. Copper, which were used in the clandestine manufacture and clearance of the goods.

5. Heard both sides and perused the case records. In the present proceedings, the appellant Shri Kaluram Ramdayal Heda supplied raw materials on bills and without bills to the manufacturer M/s. J.M. Copper. It is observed from the statement of Shri Kaluram Ramdayal Heda dated 09.06.2009, reproduced in Para 7 of the show cause notice dated 21.8.2009 that appellant has sold the copper wire rods to the manufacturer without bills. However, it is not coming out anywhere from his statement or statement dated 27.3.2009 of Shri Vikram Jagdishbhai Khunt, power of attorney holder of the manufacturer M/s. J.M. Copper that appellant was aware that the raw materials supplied will be used in the clandestine manufacture and clearance of the goods. Secondly, the appellant, at no stage has dealt with the goods clandestinely manufactured and cleared by the manufacturer. In this regard, it is relevant to reproduce the provisions of Rule 26 of the Central Excise Rules, 2002, which reads as follows:-

RULE 26. Penalty for certain offences.  (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding the duty on such goods.

From the above provisions, it is evident that for imposition on a person he should have acquired possession of or in any way concerned in transporting, removing, depositing etc. of any excisable goods which he knows or has reason to believe, are liable to confiscation under the Central Excise Act or Central Excise Rules. There is no evidence on record that appellant had knowledge that raw materials supplied by him will be used in the clandestine manufacture and clearance of the finished goods made out of raw material supplied. The case law of Ashok Joshi vs. Commissioner Central Excise, Jaipur (supra) clearly apply to the facts of the present case. In view of the above observations appeal filed by the appellant is required to be allowed.

6. Appeal filed by the appellant is allowed with consequential relief, if any.

(Operative part of the order pronounced in the Court)

(H.K. Thakur) Member (Technical) .KL

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