Shri Siyaramji Gupta vs Cce Aurangabad

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, WEST ZONAL BENCH AT MUMBAI COURT NO. II

APPEAL NO. E/416, 459, 460/10  Mum

(Arising out of Order-in-Original No. 93/C.Ex./Comm/2009 dated 20.11.2009 passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Aurangabad)

For approval and signature:

Shri. M.V. Ravindran, Member (Judicial)

1. Whether Press Reporters may be allowed to see : No 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 : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

Shri Siyaramji Gupta Shri Krishna Sahebrao Patil Dongaonkar Shri Ramnath Bhanudas Patil : Appellant

Versus

CCE Aurangabad

Respondent

Appearance

Shri Mimesh Mehta, Advocate for Appellants Shri V.K. Agarwal, Addl. Commissioner (A.R.) for Respondents

CORAM:

Shri. M.V. Ravindran, Member (Judicial)

Date of Hearing : 19.03.2015 Date of Decision : 19.03.2015

ORDER NO.

Per : M.V. Ravindran As the same question of law and facts arise, all these three appeals are being disposed of by a common order.

2. Heard both sides and perused the records.

3. The issue involved in all these appeals is regarding penalties imposed on the appellants under Rule 26 of the Central Excise Rules 2002.

4. Learned Counsel Shri Nimesh Mehta is appearing on behalf of the appellants Shri Krishna Sahebrao Patil Dongaonkar and Shri Ramnath Bhanudas Patil, while the appellant Shri Siyaramji Gupta is not represented. Learned Counsel took me through the impugned order; submits that the question of imposition of penalty under Rule 26 may not arise as the appellant is not company but Shri Krishna Patil Dangaonker is the Chairman and Shri Ramnath Bahudas Patil, Secretary and Ex-Managing Director of the of the assessee company M/s. Gangapur SSK Ltd. are not handling day to day matters. On a specific query from the Bench he would submit that as Chairman and Secretary were not informed that the sugar which has been cleared for export will not be exported and diverted to home consumption.

5. Learned A.R. would reiterate the findings of the adjudicating authority in the impugned order at para 8.3. He would submit that the Chairman and the Secretary and the MD were aware that the sugar which was cleared for export was not exported and diverted to home consumption. According to him the statement recorded of Shri Siyaramji Gupta, Exporter, is very clear indicating that they have informed that the sugar which has been cleared for export has not been exported and the amount requires to be paid to department which he had kept with the assessee.

6. On consideration of the submissions, made by both sides and perusal of the records, I find that the issue involved in this case is whether all the three appellants are required to be visited with penalties imposed under Rule 26 of the Central Excise Rules 2002. In order to appreciate the correct legal position, the said Rule 26 of Central Excise Rules, 2002 is reproduced.

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 or *[two thousand rupees], whichever is greater.?[(1)] [(2)?Any person, who issues -

(i) an excise duty invoice without delivery of the goods specified therein or abets in making such invoice; or

(ii) any other document or abets in making such document, on the basis of which the user of said invoice or document is likely to take or has taken any ineligible benefit under the Act or the rules made thereunder like claiming of CENVAT credit under the CENVAT Credit Rules, 2004 or refund, shall be liable to a penalty not exceeding the amount of such benefit or five thousand rupees, whichever is greater.] It can be noted from the above reproduced Rule, penalty can be imposed on any person who acquires possession of excisable goods which he knows or has reason to believe that the goods are liable for confiscation. In the cases in hand it is not in dispute that the sugar which has been cleared for export purpose was cleared on examination and on debiting of B-1 Bond AR-4 documents. If the bond amount (which is executed for undertaking discharge of duty liability), is debited, and the goods are cleared; the question as to they may be confiscated may not arise and in my considered view all the three appellants could not have any reason to believe that sugar cleared for export is liable for confiscation. Accordingly, in view of the foregoing penalties imposed by the adjudicating authority are set aside and the appeals are allowed.

(Dictated in Court)

(M.V. Ravindran) Member (Judicial)

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