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2017 Supreme(Raj) 2579
RAJASTHAN HIGH COURT (JAIPUR BENCH)
K.S. Jhaveri, Vijay Kumar Vyas, JJ.
Autolite India Ltd. - Appellant
Versus
Commissioner Of Central Excise, Jaipur-I - Respondent
Central Excise Appeal No. 44 of 2008
Decided On : 14-09-2017
Shri Sameer Jain with Ms. Mahi Yadav, Advocates, for the Appellant; Shri Anurag Kalawatia, Advocate, for the Respondent
The Tribunal's findings that the goods had marketability and were removed without proper challan were contrary to the record.
Headnote:
CENTRAL EXCISE ACT, 1944 - SECTION 11AB, 11AC - INTEREST AND PENALTY - IMPOSITION OF INTEREST AND PENALTY UNDER SECTIONS 11AB AND 11AC - TRIBUNAL'S FINDING THAT GOODS HAD MARKETABILITY AND WERE REMOVED WITHOUT PROPER CHALLAN IS CONTRARY TO RECORD - MATTER REMANDED TO TRIBUNAL FOR FRESH DECISION.
Fact of the Case:
The appellant challenged the Tribunal's order allowing the department's appeal and imposing interest under Section 11AB and penalty under Section 11AC of the Central Excise Act, 1944. The appellant argued that the liability to pay the disputed duty arose before the provisions of Section 11AB came into force and that the Tribunal erred in imposing a penalty under Section 11AC when the duty was deposited before the show cause notice was issued.
Finding of the Court:
The court found that the Tribunal's finding that the goods had marketability and were removed without proper challan was contrary to the record. The court also noted that the Tribunal did not consider the appellant's claim that the goods were not marketable and were used as input in the manufacture of final products.
Issues: 1. Whether the Tribunal was right in imposing interest under Section 11AB when the liability to pay the disputed duty arose before the provisions of Section 11AB came into force? 2. Whether the Tribunal was right in imposing a penalty under Section 11AC when the duty was deposited before the show cause notice was issued?
Ratio Decidendi: The court held that the Tribunal's findings were contrary to the record and that the matter should be remanded to the Tribunal for a fresh decision. The court clarified that the Tribunal should not be influenced by its earlier decision against the assessee.
Final Decision: The appeal was disposed of and the matter was remanded to the Tribunal for a fresh decision.
JUDGMENT
ORDER
K.S. Jhaveri, J. - By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has allowed the appeal of the department. Counsel for the appellant pointed out that the appellant has preferred this appeal against the finding which has been arrived at against him.
2. This Court while admitting the matter framed the following substantial questions of law :
"(i) Whether in the facts and circumstances of the case, learned Tribunal was right in law in allowing the appeal of Revenue with regard to imposition of interest under section 11AB of the Act, especially when it is an admitted fact that the liability to pay the disputed duty arose on 18-12-2000 i.e. prior to the day when provisions of Section 11AB were not in force in terms of Section 11AB(2) of the Central Excise Act, 1944?
(ii) Whether in the facts and circumstances of the case, and as per settled position of law, the learned Tribunal was right in law in imposing equivalent penalty under section 11AC of the Act especially when the demand of duty to the tune of Rs. 1,13,825 were deposited prior to issuance of show cause notice and proviso to Section 11AC grants an abatement of 75% if the duty is deposited within 30 days of receipt of order in original?
(iii) Whether in the facts and circumstances of the case the findings arrived at by the learned Tribunal will be termed perverse and violative of principles of natural justice as it has not considered the fact of marketability vis-a-vis Section 2(d) of the Act and the removal of goods under cover of challan?"
3. Counsel for the appellant has taken us to the order of the Tribunal which reads as under : -
"The contention of the counsel that the seized goods from the auto rickshaw had no marketability and as such no duty could be charged, cannot be accepted as it was never pleaded before the authorities below. Moreover, it is difficult to accept that the seized adopters and rims have no market value. No evidence has also been produced by the assessee even to substantiate this plea. The ratio of the law laid down in Union of India v. Sornic Electrochem (P) Ltd. - 2002 (145) E.L.T. 274 (S.C.) referred to by the counsel, wherein the criteria for determination of marketability of the goods has been laid down by the Apex Court is not attracted to the case in hand, rather it goes against the assessee/respondents as it has been observed by the Apex Court that essence of marketability is neither form nor in shape or condition of the article, but the commercial identity of the article known to the market."
4. It is contended that the findings of the Tribunal is contrary to record inasmuch as right from beginning the claim which has been made by the present appellant reads as under : -
"7. The name and addresses and Reg. No. if any, of the person/undertaking the above manufacture/process/operation.
(ii) M/s. India International, Near Char Darwaja, Khander Ka Rasta, Gangapole, Jaipur
Description with Chapter Heading Nos. of the resultant goods after process. Further the goods after process are able to duty.
Automobile Headlights and parts 8512.00
Dutiable for Home Consumption Under bond for Exports.
10. Whether the waste or scrap, if any arising during the above manufacture/process/operation should be returned to the factory or not.
Yes, CRCA sheet scrap will be returned."
5. He has also relied upon the defence taken before the authority which reads as under : -
"(iv) It was submitted that the statement of Shri S.B.S. Rathore was misleading. The fact is that the adopters are not been cleared in the market. These are only used as input in the manufacture of final product. It was submitted that it is not correct to say that the entire quantity received from the job worker was properly accounted for in the records and entire verification can also be made still now to arrive at the factual position. The contention of Shri Rathore, that the entire quantity has been removed clandest
