Shri Yunusbhai Shamsuddin Devdiwala vs Commissioner, Central Excise & Service ...

Appeal No.E/700,701/2012 [Arising out of OIO No.18-19/COMMISSIONER/RAJU/AHD-I/2012, dt.31.05.2012, passed by Commissioner, Central Excise & Service Tax, Ahmedabad]

1. Shri Yunusbhai Shamsuddin Devdiwala, 2. Shri Sabirbhai Shamsuddin Devdiwala. Appellants

Vs

Commissioner, Central Excise & Service Tax, Ahmedabad-I Respondent

Represented by:

For Appellant: Shri Kuntal Parikh, Advocate For Respondent: Shri L. Tendupatra, Authorised Representative

For approval and signature:

Honble Mr. P.K. Das, Member (Judicial)

1. Whether Press Reporters may be allowed to see the No 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 of Seen the order?

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

CORAM:

HONBLE MR. P.K. DAS, MEMBER (JUDICIAL)

Date of Hearing/Decision:28.05.2015

Order No.A/ 10703-10704/2015, dt.28.05.2015

Per: P.K. Das

These appeals are arising out of a common order and therefore, both are taken up together for disposal. The Appellants are partners of M/s Vijay Textiles, filed, these appeals against imposition of penalties of Rs.5 lakhs each under Rule 209A of erstwhile Central Excise Rules, 1944 read with Rule 26 of Central Excise Rules, 2002.

2. Heard both the sides and perused the records.

3. In the earlier occasion, the Adjudicating authority confirmed the demand of duty along with interest and imposed penalty on the partnership firm. The penal provisions against these Appellants (i.e. partners) were dropped by the Adjudicating authority. The partnership firm and the Revenue, both filed appeals before the Tribunal against the earlier Adjudication order. Revenue filed appeal on the ground that the penalty should be imposed on the partner. By Final Order No.A/1921-1925/WZB/AHD/ 2010, dt.16.12.2010, the Tribunal disposed of both the appeals to the extent, demand of duty along with interest was upheld and reduced the penalty to Rs.5 lakhs on the partnership firm. Regarding imposition of penalty on the partner, the Tribunal remanded the matter for considering imposition of the penalty on the partners.

4. The learned Advocate appearing on behalf of the Appellants submits that Honble Gujarat High Court in the case of CCE Surat Vs Mahendra Kumar Kapadia  2010 (260) ELT 51 (Guj.) held that no penalty would be imposed on the partners once separate penalty is imposed on the partnership firm. He also relied upon the decision of Honble Gujarat High Court in the case of CCE Vs Jai Prakash Motwani  2010 (258) ELT 204 (Guj.).

5. On the other hand, the learned Authorised Representative for the Revenue submits that the Adjudicating authority had given detailed finding of the role of the partner for wrong availment of SSI exemption by using the brand name of other person. He relied upon various decisions as under:-

i) CCE Daman Vs Mohd. Amin A.S. Lakha 2012 (275) ELT 465 (Tri-Ahmd)

ii) Apurva Aluminum Corporation Vs CCE Vadodara 2010 (261) ELT 515 (Tri-Ahmd)

iii) Apurva Aluminum Corporation Vs CESTAT 2014 (302) ELT 495 (Guj.)

iv) Prakash Metal Works Vs Collr.C.E., Ahmedabad 2007 (216) ELT 660 (S.C.)

6. I find that in this particular case, the Tribunal remanded the matter to the Adjudicating authority to reconsider the imposition of penalty on the partner. In the impugned order, the Commissioner observed that the Appellants had filed wrong declarations with wilful suppression of actual manufacturing process carried out by them and suppressing the nature and quality of the fabric manufactured by them and mis-declaring their actual classification with intent to evade payment of duty.

7. The learned Advocate had not seriously disputed the case on fact. He relied upon the decision of Honble Gujarat High Court. In both the cases, the Honble High Court observed that the role of the partner was not indicated in the Show Cause Notice. In the present case, the Adjudicating authority had given the detailed finding on the role of the partner and therefore, the case laws are not applicable. The learned Advocate submitted that the Tribunal had remanded the matter for reconsideration of imposition of penalty on the partner.

8. I find that the Tribunal in the remand order directed the Commissioner for re-quantification of the demand payable within the normal period of limitation. In effect, the demand of duty for the extended period of limitation was dropped. Similarly, it was directed to examine the role of the partners for imposition of penalty. The Tribunal in the remand order already reduced the penalty on the partnership firm. So, the quantum of penalties on the partners are excessive.

9. In view of the above discussion, the penalties imposed on the Appellants are reduced to Rs.50,000.00 (Rupees Fifty Thousands only) each. Both the appeals filed by the Appellants are disposed of in the above terms.

(Dictated & Pronounced in Court)

(P.K. Das) Member (Judicial)

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