9911796707
TMI Blog2014 (11) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... l Excise Rules, 1944. On appeal filed by the respondents, the Commissioner (Appeals) in the impugned order partly remanded the matter to the adjudicating authority for determination of the facts on the clearance of modvatable inputs. The Commissioner (Appeals) also set aside the penalty of Rs. 3,03,581/- imposed under Rule 57 (I) (4) as well as the penalty of Rs. 1,50,000/- imposed under Rule 173Q of CER. Revenue filed appeal before the Tribunal against the impugned order in respect of dropping of penalty. The Tribunal by Final Order No. 1382/2007 dated 21.11.2007, dismissed the Revenues appeal, on the ground that Rule 57 (I) came into effect from 23.07.1996 and no penalty is leviable under Rule 57 (I) (4) for the period prior to 23.07.1996. Hence, the Tribunal held that no penalty can be imposed for the period prior to 23.07.1996 and also upheld the order of the lower authority for dropping the penalty for the period 23/7/1996 to 28/09/1996. Aggrieved by the order of the Tribunal, the Revenue filed C.M.A. No. 3501/2008 before the Hon'ble Madras High Court. The Hon'ble High Court of Madras vide Order dated 30.01.2014 set aside the order of the Tribunal and remanded the matter to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t reversal of modvat credit availed and they have not cleared any manufactured items. Only the bought out items were cleared as replacement for defective parts during after sales service. They have paid an amount of Rs. 1,71,614/-, which was already appropriated in the adjudication order.. He further submits that the Commissioner (Appeals) has rightly allowed their appeal and held that the penalty is not imposable under Rule 57(I) (4) of CER s there is no fraud, collusion, suppression of facts with intent to evade payment of duty. He relied upon the following case laws in support of his contention. 1. UOI Vs. Rajasthan Spinning & Weaving Mills 2009 (238) ELt 3 (S.C.) 2. CCE, Coimbatore Vs. Elgi Eqpts. Ltd. 2001 (128) ELT 52 (S.C.) 6. I have carefully considered the submissions of both the sides and the directions of the Hon'ble High Court of Madras in their Order dated 30.01.2014 and perused the records. The limited issue to be considered in the present appeal is whether penalty is imposable under Rule 57 (I) (4) of CER for the period 23.07.1996 to 28.09.1996. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit availed on the goods ie., controllers, drivers etc., cleared to their customers as warranty replacement. Both the contravention of Rule 57(I) and suppression of facts were clearly brought out in the show cause notice as the respondents have cleared the goods to their customers as warranty replacement without following any of the procedures prescribed under Central Excise Rules. Further, it is seen that the adjudication authority in his order dated 21.12.99 has clearly discussed in his findings for invoking extended period and imposition of penalty under Section 11 AC read with Rule 57(I) of the CER. 9. The appellate authority has set aside the penalty only on the grounds that the penalty is not imposable for the period prior to 23.07.1996, as the provision under 57(I) came into effect from this date and also set aside the penalty for the subsequent period. The Revenue has clearly brought out in the show cause notice and in the adjudication order, the contraventions, suppression of facts with intent to evade payment of duty, as the respondents have cleared the modvatable inputs to their customers as warranty replacement without reversing the modvat credit taken on them and with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dopting any of the means mentioned in the section. 22.?There is another very strong reason for holding that Dharamendra Textile could not have interpreted Section 11AC in the manner as suggested because in that case that was not even the stand of the revenue. In paragraph 5 of the decision the court noted the submission made on behalf of the revenue as follows: 5. Mr. Chandrashekharan, Additional Solicitor General submitted that in Rules 96ZQ and 96ZO there is no reference to any mens rea as in section 11AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
