Advocates:
Advocate Appeared:
For the Appellant :Mr. Deepak Gupta, Advocate
For the Respondent: Mr. Ajay Kalra, Sr. Standing Counsel

JUDGMENT :

Sudeepti Sharma, J.

The present appeal is filed under Section 35G of the Central Excise Act, 1944 for quashing of order dated 01.09.2010 (Annexure A-4), whereby Customs, Excise and Service Tax Appellate Tribunal, New Delhi (for short, 'the Tribunal') allowed the appeal filed by the respondent holding that the appellant is liable to fine and penalty under Rule 25(1)(b) of the Central Excise Rules, 2002.

2. The brief facts of the case are that the appellant is engaged in manufacture of forged iron & steel products. The officers of DGCEI, on 23.08.2003, searched the business premise of the appellant. The officers physically verified the stock. The officers seized the stock. The respondent, on 20.02.2004, issued show cause notice proposing confiscation of seized goods. The appellant, because of non-availability of documents failed to file reply. The adjudicating authority vide order dated 14.05.2004 ordered to confiscate the goods and imposed fine and penalty of 5 lakh each. The adjudicating authority also imposed penalty upon the director. The appellate authority allowed the appeal of the director but dismissed the appeal of the appellant vide order dated 29.07.2004. The Tribunal allowed the appeal of the appellant by way of remand vide order dated 01.03.2005. The adjudicating authority vide order dated 04.01.2006 (A-1) again adjudicated the show cause notice and confirmed the confiscation and imposed fine of 5 lakh and penalty to the tune of Rs.9,29,896/-. The adjudicating authority imposed penalty under section 11AC of Central Excise Act, 1944. The appellant filed reply and furnished returns RG-23A Part-I Register and ER-1 (monthly return) for the month of July, 2003. The appellate authority vide order dated 31.03.2006 (A-2) allowed the appeal of the appellant with finding that raw material and finished goods were seized merely because of non-accountal of goods and there was no reason to believe that goods were meant for clandestine removal of goods.

3. The respondents assailed order dated 31.03.2006 before the Tribunal, who vide order dated 01.09.2010 (Annexure A/4) allowed the appeal. The same is impugned herein.

4. Learned counsel for the appellant contends that the Tribunal has already held that there was no evidence regarding clandestine removal of goods, therefore, presumption of Section 11AC is un-warranted. In support of his contentions, he has relied upon a judgment of this Court in the case of Commissioner of Central Exicse Vs. Sadashiv Ispat Ltd. [2010 SCC Online P&H 1237] wherein it has been held as under:-

"8. A perusal of the impugned order shows that no evidence has been produced by the Revenue that the respondent had cleared the goods unaccounted and the goods were kept for clandestine clearance. In the present case, even if the goods had not been entered in the RG-1 register, yet the same cannot lead to the conclusion that the goods were meant for clandestine removal. Both the Commissioner as well as the Tribunal have returned a concurrent finding of fact that there was no mens rea on part of the respondent to clandestinely remove the goods.

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12. In the present case, the Department has failed to prove the element of mens rea for imposition of penalty. It has been so held by the Commissioner as well as the Tribunal that no case was made out to impose penalty. The finding recorded that no case was made out for imposition of penalty is not shown in any manner to be perverse.

13. In view of the above, we find no merit in this appeal and the same is accordingly dismissed."

He further relies upon the judgment of Delhi High Court in the case of Commissioner of Customs (Import & General) Vs. Care Foundation [2014(302) E.L.T. 181 (Del.)], wherein it has been held as under:-

"6. In the opinion of this Court, no exception can be taken to the finding that since there was no demand under Section 28(8) of the Customs Act for duty, no penalty could have been imposed under that provision and consequently the penalty und