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TMI Blog2013 (7) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner or by the Tribunal? 2. As can be noticed from the above questions, this appeal is only concerned with the question of penalty under Rule 173Q(1)(d) of the Central Excise Rules, 1944 (hereinafter referred to as „the said Rules'). The issue with regard to the payment of central excise duty on the production of raw kimam and other ingredients such as saffron, musk, perfumes and other spices stands settled by the Supreme Court by virtue of its judgment dated 21.04.2005 in civil appeal Nos.1506-1508/2000 in the case of the present appellant itself. The issues raised before the Supreme Court in that round of litigation were relating to (a) the excisability of kimam and classification thereof under sub-heading 2404.40 (w.e.f. 23.07.1996) and 2404.49 (prior to 23.07.1996); (b) the rationale for invoking the extended period of limitation under Section 11A(1); and (c) eligibility for the benefit of proforma and modvat credit classification of chewing tobacco kimam. All these issues were decided against the appellant and in favour of the revenue. This would be clear from the following extracts of the Supreme Court decision :- "It was urged that the assessee was under a bonafid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for duty herein and, therefore, there was no intention to evade payment of duty. We do not find any merit in these submissions. As stated above, the adjudication in this case was confined to the question of excisability and concealment of the existence of two units in which the compound (kimam) was manufactured. No explanation has been given by the assessee for not disclosing the affairs of these units, particularly when the assessee was in business for couple of years and when the assessee had been dealing with other traders who operated from licensed factories. It was for the assessee to explain the reasons for not getting the units registered or licensed. It was for the assessee to explain its failure to maintain the records under the 1944 Act and rules thereunder. In each of the above decisions, we find that there was substantial compliance of the rules under the said Act. In each of the decisions the findings indicate technical non- compliance and not total non-compliance of the rules. It was for the assessee to explain the basis of its alleged bonafide impression. In this connection, no evidence was put before the commissioner about receipt and utilization of the compound i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h regard to the applicability of notification No.121/94-CE dated 11.08.1994. The Supreme Court had observed that the Tribunal had remanded the case to the Commissioner for re-examination of the limited question of its applicability. The Supreme Court further noted that the Tribunal had also directed the Commissioner to consider the quantum of penalty, fine etc. in the light of its findings on the applicability of the said notification. The Supreme Court made it clear that it did not wish to express any opinion on the applicability of notification dated 11.08.1994. However, it confirmed the issue of excisability and clandestine manufacture and removal of kimam from the two unlicensed/unregistered units at 96, Okhla Industrial Estate, New Delhi and E-1, Maharani Bagh, New Delhi. To that extent, the Supreme Court did not interfere with the decision of the Tribunal dated 1.10.1999. 4. The learned counsel for the appellant fairly stated that insofar as the question of applicability of notification No.121/94-CE was concerned, that issue had subsequently been settled by the Supreme Court by virtue of its decision in Commissioner of Central Excise, New Delhi Vs. Hari Chand Shri Gopal : 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y evidence and it is for this reason that the Supreme Court concluded that the appellant was not able to demonstrate its bona fides and, therefore, the Supreme Court did not interfere with the Tribunal's findings that extended period of limitation prescribed in the proviso to Section 11A of the said Act had been correctly invoked. The learned counsel for the appellant however submitted that because the appellant had been given a second opportunity on account of the remand made by the Tribunal on the issue of penalty, the appellant was able to produce evidence to show that the perfumed kimam produced at its two units in question had been captively consumed by the appellant itself in the manufacture of chewing tobacco, on which full duty was paid. 6. The learned counsel submitted that this evidence would go to show that the appellant did not have an intention to evade duty inasmuch as, had the appellant complied with the statutory provisions and got the two units in question registered and paid central excise duty on the clearances of perfumed kimam, the appellant would have got credit for the same in its other units which were producing chewing tobacco and, therefore, the revenue e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appellant filed an appeal being Excise Appeal No.1463/2005 before the said Tribunal. The appeal was in respect of other grounds as also on the point of penalty. By virtue of an order dated 07.04.2011 the Tribunal dismissed the appellant's appeal. However, since the said order only dealt with the other issues and the question of penalty had not been considered by the Tribunal in the said order dated 07.04.2011, the appellant filed an application (rectification of mistake application) before the Tribunal which was disposed of by the impugned order dated 17.07.2012 whereby the Tribunal specifically addressed the issue of penalty under Rule 173Q(1)(d) of the said Rules. By virtue of the said order, the Tribunal quoted the portions of the Supreme Court decision dated 21.04.2005, which we have already extracted above. After setting out the said extract, the Tribunal held that the Supreme Court had held that the appellant was fully aware that other persons who had produced similar compounds (perfumed kimam) had applied for registration and yet the appellant had not taken any steps to get its units registered. The Tribunal further observed that the Supreme Court had held that these u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in view of the remand made by the Tribunal by virtue of its order dated 1.10.1999 and penalty proceedings being generally separate and independent of the quantum proceedings, it was incumbent upon the Commissioner to have examined the evidence that was produced at the stage of remand by the appellant which would in any way alter the case for levy of penalty on the appellant. In the first round the Supreme Court had observed that the bona fides of the appellant were not established inasmuch as the appellant had failed to prove the same. The Supreme Court had come to the conclusion inasmuch as it felt that the burden to prove the defence of bona fides was on the appellant, which it had failed to discharge. In the second round when the penalty issue was being considered by the Commissioner some material/evidence was produced by the appellant in an attempt to discharge its burden and to establish its bona fides. That material/evidence has not been considered by the authorities below. Neither by the Commissioner of Central Excise nor by the Tribunal. Therefore, we are of the view that the impugned order ought to be set aside and the matter ought be remitted to the Tribunal for consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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