2015 (10) TMI 1667 - AT - Central Excise

Waiver of pre deposit - Imposition of penalty - Held that - It appears that during the course of audit, it was learnt that M/s. Ind Synergy Ltd. did not remit the Excise Duty to the full extent mentioned in the invoices covering transaction of sale to the appellant, Therefore, proceedings were initiated against M/s. Chopra Brothers, the appellant herein and other traders/dealers, manufacturer of the billets and against M/s. Jai Sidh Yogi Steel Rolling Mills. These proceedings culminated in the primary adjudication order dated 4-10-2010 whereby the specified penalty was imposed on M/s. Ind. Synergy Ltd. and penalty of ₹ 39,910/- was imposed on the appellant, M/s. Chopra Brothers. Penalty was also imposed on the other dealers. - Since it is not alleged that the appellant had passed on a credit of Duty in excess what was mentioned in invoices under which it had purchased billets and sold these to M/s. Jai Sidh Yogi Steel Rolling Mills, imposition of penalty on the appellant is illegal. Imposition of penalty without establishing any culpability cannot be sustained. The order passed by the primary Authority as confirmed by the Appellate Commissioner, New Delhi cannot therefore, be sustained. - Decided in favour of assessee.

Issues:
1. Appeal against appellate order dated 6-3-2013 passed by the Commissioner of Customs (Appeals), New Delhi.
2. Imposition of penalty on the appellant for under-remittance of Excise Duty.
3. Allegations against M/s. Ind Synergy Ltd. for not remitting Excise Duty to the full extent mentioned in the invoices.

Analysis:

1. The appeal was preferred by the assessee against the appellate order dated 6-3-2013 passed by the Commissioner of Customs (Appeals), New Delhi, which rejected the appeal against the adjudication order dated 4-10-2010 passed by the Deputy Commissioner, Central Excise, Ludhiana.

2. The case involved the imposition of a penalty on the appellant, a registered dealer, for under-remittance of Excise Duty. The appellant purchased iron billets from M/s. Ind Synergy Ltd. and sold them to another manufacturer, passing on the Duty credit. However, it was discovered during an audit that M/s. Ind Synergy Ltd. did not remit the Excise Duty to the full extent mentioned in the invoices, leading to penalties being imposed on various parties, including the appellant.

3. The Revenue did not allege that the appellant colluded with M/s. Ind Synergy Ltd. for under-remittance of Excise Duty or had prior knowledge of the evasion. Since there was no evidence that the appellant passed on a credit of Duty in excess of what was mentioned in the invoices, the imposition of the penalty was deemed illegal. The Tribunal held that penalties cannot be imposed without establishing culpability, and as such, the order imposing penalties on the appellant was quashed.

4. The Tribunal concluded that since there was no proof of the appellant's involvement in the under-remittance of Excise Duty and no collusion with the manufacturer, the penalties imposed on the appellant were unjustified. Therefore, the impugned order was quashed, the appeal was allowed without costs, and the stay application was also disposed of.

This detailed analysis of the judgment highlights the issues involved, the facts of the case, the legal arguments presented, and the final decision reached by the Tribunal, providing a comprehensive understanding of the legal proceedings.

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