2016 (8) TMI 1107 - AT - Central Excise

Whether the entire consideration received by the manufacturing unit in respect of goods cleared clandestinely has to be treated as cum-duty price and the duty required to be paid by them needs to be re-quantified - Clendestine removal - Held that - in view of the decision of Hon ble supreme Court in the case of Amrit Agro Industries Ltd. vs. CCE 2007 (3) TMI 14 - SUPREME COURT OF INDIA , the department itself accepted that the normal price includes the duty element and as such the entire consideration has to be considered as inclusive of excise duty. Therefore the demand confirmed against the appellant is required to be recomputed by taking the entire value of the goods as being cum-duty. For the said purpose the matter is being remitted to the adjudicating authority for doing the needful. Imposition of penalty on proprietor - Rule 26 of the Central Excise Rules, 2002 - Appellant contended that inasmuch as penalty already stands imposed upon the proprietary unit, the imposition of separate penalty upon the Proprietor is not called for - Held that - by following the decision of Tribunal in the case of Royal Springs vs. CCE, New Delhi-I 2002 (4) TMI 547 - CEGAT, NEW DELHI , the penalty imposed upon the Prop. was set-aside, the said decision stands confirmed by the Hon ble Supreme Court in Commissioner vs. Royal Springs 2002 (10) TMI 788 - SUPREME COURT . The issue is well settled and does not require the support of any further decisions. Therefore, the imposition of penalty upon Sh. Kewal Krishan Ajimal, Prop. of M/s Vishavakarma Hydraulic Works is set aside. - Appeals disposed of

Summary

Issues:
Confirmation of demand of duty, imposition of penalty, re-quantification of duty, imposition of penalty on proprietor.

Confirmation of Demand of Duty:
The appeal challenges the confirmation of duty demand of ?68,14,631 against the appellant for alleged clandestine removal of goods. The advocate for the appellant does not dispute the duty demand but argues for re-quantification by treating the entire consideration as cum-duty price. The Tribunal refers to the Supreme Court's decision in the case of CCE vs. Maruti Udyog Ltd., wherein it was held that duty payable should be re-determined by deducting the duty element from the selling price to determine the assessable value of goods. The Tribunal also cites other cases supporting this principle. The Tribunal remits the matter to the adjudicating authority for re-computation based on the entire value of goods as cum-duty.

Imposition of Penalty:
A penalty of ?25 lakhs was imposed on the proprietor of the appellant entity. The appellant challenges this penalty, arguing that once the proprietary unit is penalized, no separate penalty should be imposed on the proprietor. The Tribunal relies on various decisions, including the case of Royal Springs vs. CCE, to conclude that separate imposition of penalties on the proprietor and the proprietary concern is not justified. The Tribunal sets aside the penalty imposed on the proprietor and allows the appeal with consequential relief.

Conclusion:
The Tribunal remands the appeal for re-quantification of duty based on the entire value of goods as cum-duty and sets aside the penalty imposed on the proprietor. Both appeals are disposed of accordingly.