Shri Parveen Chadha, Mg. Director vs C.C.E. & S.T. Ludhiana

[Arising out of Order-in-Appeal No. 235-236/ST/APPL/LDH/2011 dated 20.09.2012 by the Commissioner of Customs, Central Excise & Service Tax (Appeals), Chandigarh].

For approval and signature:

Honble Shri Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2 Whether it should be released under Rule 27 of the 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?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Excellent Forge Pvt. Ltd.

Shri Parveen Chadha, Mg. Director .Appellants

Vs.

C.C.E. & S.T. Ludhiana .Respondent

Appearance:

Shri Kamaljeet Singh, Advocate for the Appellants

Shri R.K. Mishra, DR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Reserved on: 04.02.2015

Pronounced on:23.02.2015

FINAL ORDER NO. 50407-50408/2015-EX(SM)

Per Ashok Jindal:

The appellants are in appeal against the impugned order imposing penalty on them.

2. The facts of the case are that appellant is engaged in manufacturing of Spanners and Wrenches. On 16.01.2009 the premises of the appellants were searched and it was found that there was a shortage of inputs of 114.880 Metric Tonnes. The appellant could not give any explanation for shortage thereon. It was also found that appellant has taken Cenvat Credit of Rs.2,19,466/- on nickel plates on the basis of invoices issued by M/s. Himalya International, Ludhiana, which in turn was issued on the basis of invoices issued by M/s AIP industries, Ludhiana. The said unit was registered for manufacture of copper ingots, copper wires and copper / insulated wires and not for manufacture of nickel plates and their registration has been cancelled since November 2006. It was also found that appellant has cleared samples to their customers without payment of duty of Rs. 16,120/- against gate pass without issuance of any invoices. In these set of circumstances, Cenvat Credit availed of Rs.6,94,701/- was sought to be denied which was wrongly availed by the appellants and a demand on duty of Rs. 16,120/- was sought to be confirmed for clearance of samples without payment of duty. The show cause notice was issued to demand the duty along with interest and imposition of penalty on both the appellants. The show cause notice was adjudicated. A sum of Rs.10 lakhs paid by the appellant during the course of investigation was appropriated against the impugned demands along with interest and penalties equivalent to duty were confirmed against both the appellants. Aggrieved from the order and imposition of penalty appellants are before me.

3. The ld. Counsel for the appellant submits that the appellants are not disputing duty. They are contesting only penalties imposed on them by way of the appeals. He submits that as the appellant has paid entire amount of duty along with interest and some portion of the penalty before issuance of the show cause notice. Therefore, penalty on the main appellant be restricted to 25% of the duty as per the proviso of section 11 (AC) of the Central Excise Act. Therefore, penalty be reduced to that extent. He further submits that for imposition of penalty under Rule 26 on the appellant, first the goods were required to be held for liable for confiscation as the adjudicating authority has not held the case which are liable for confiscation. Therefore, penalty under Rule 26 on the appellants is not impossible.

4. On the other hand the ld. AR reiterated the findings of the impugned order.

5. Heard the parties. Considered the submissions.

6. On perusal of the impugned order, I find that the appellant has paid a sum of Rs. 10 lakhs towards the demand on duty of Rs.7,10,821/- before issuance of the show cause notice. In these circumstances, the benefit of provision under Section 11 (AC) of the Act was required to be given to the appellant which both the lower authorities has failed to do so. In these circumstances, I reduce penalty on the main appellant to 25% of the duty confirmed which the appellant shall pay after adjusting the amount already paid within 30 days of the receipt of this order failing which the appellant shall be required to pay 100% duty as penalty.

7. Further I have gone through the impugned order. As the main appellant has paid the entire amount of duty, interest and 25% duty as penalty before issuance of the Show Cause Notice, the proceedings against all the noticees comes to an end, therefore penalty on Shri Praveen Chadha is set aside.

8. Appeals are disposed off in the above terms.

[Pronounced in the open Court on 23.02.2015]

(Ashok Jindal) Member (Judicial)

Bhanu

2

E/55415 & 55416/2013-EX(SM)