2006 (8) TMI 397 - AT - Central Excise

Summary

Issues:
Appeal against penalty imposed by Commissioner of Customs and Central Excise on M/s. Transmission Corporation of Andhra Pradesh Ltd. for alleged evasion of Central Excise duty.

Analysis:
The appeal was filed by M/s. Transmission Corporation of Andhra Pradesh Ltd., a State Government Undertaking, challenging the penalty of Rs. 25 lacs imposed by the Commissioner of Customs and Central Excise, Raipur, Chattisgarh. The show cause notice alleged that the appellant was aware that the supplier was not recognized as an International Organization under the United Nations Act and had purchased goods without the necessary excise duty exemption certificate, assisting in the evasion of Central Excise duty. The impugned order observed that the appellant knew they were purchasing excisable goods liable to confiscation and had issued duty exemption certificates despite purchasing goods for a project financed by JBIL from BHEL on payment of duty. However, the Tribunal found no sufficient reason to impose such a heavy penalty on a State Undertaking like the appellant, noting the lack of mala fide intention. Considering the circumstances, the Tribunal granted a total waiver of the penalty without any pre-deposit condition, staying the impugned order.

The Tribunal's decision to grant a waiver of the penalty was based on the understanding that the appellant, being a State Undertaking, might not have had any malicious intent in the transactions. The Tribunal highlighted that the appellant had made a case for the total waiver of the penalty imposed by the Commissioner. The Tribunal's analysis focused on the fact that the appellant had purchased goods for a project financed by JBIL from BHEL on payment of duty, despite issuing duty exemption certificates at the manufacturer's request. The Tribunal considered the overall facts and circumstances of the case in determining that the penalty was not justified, leading to the decision to stay the impugned order without any pre-deposit condition. The Tribunal emphasized that the appeal would proceed to final hearing in due course, indicating that the matter was not entirely concluded with the waiver of the penalty.

In conclusion, the Tribunal's judgment in the appeal against the penalty imposed on M/s. Transmission Corporation of Andhra Pradesh Ltd. centered on the lack of sufficient reason to penalize a State Undertaking for alleged involvement in the evasion of Central Excise duty. The Tribunal's decision to grant a total waiver of the penalty without any pre-deposit condition was based on the absence of malicious intent on the part of the appellant and the specific circumstances surrounding the purchase of goods for a project financed by JBIL. The Tribunal's analysis highlighted the appellant's actions in issuing duty exemption certificates and purchasing goods on payment of duty, ultimately leading to the stay of the impugned order and the continuation of the appeal process for final hearing.