38. CEXA 104.08.doc

Urmila Ingale

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION

CENTRAL EXCISE APPEAL NO. 104 OF 2008

The Commissioner of Central Excise

Thane - II Commissionerate,

Navprabhat Chambers,

Ranade Road, Dadar (West)

Mumbai - 400 028.

.. Appellant

Vs.

1. Kamal Singhania,

Director of M/s.Usha Fashions Pvt. Ltd...Respondent No.1

2. M/s.Usha Fashions Pvt. Ltd.

Plot No.E-42, M.I.D.C. Industrial Area,

Tarapur, Boisar, District Thane

..Respondent No.2

3. M/s.S.P. Thakkar Transport Company,

174, Gaiwadi, Caval Cross Lane,

7th Galli, Kalbadevi, Mumbai 400 002. .. Respondent No.3

Mr.Swapnil Bangur a/w Mr.Siddharth Chandrashekhar i/b

Mr.Siddharth Chandrashekhar for Appellant.

Mr.Darius Shroff, Senior Advocate a/w Mr.Jas Sanghavi i/b

PDS Legal, for Respondents No. 1 & 2

CORAM : K.R.SHRIRAM, J.

M. S. KARNIK, J.

DATE: 17th SEPTEMBER 2021

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URMILA

PRAMOD

INGALE

Digitally

signed by

URMILA

PRAMOD

INGALE

Date:

2021.09.24

13:39:31

+0530

38. CEXA 104.08.doc

ORAL JUDGMENT (PER K.R.SHRIRAM, J.) :

1.

This is an Appeal preferred by the Commissioner

of Central Excise, Thane-II under the provisions of Section

35G of the Central Excise Act, 1944 impugning the order

dated 22/09/2006 passed by the Central Excise and Service

Tax Appellate Tribunal, WZB, Mumbai allowing a bunch of

Appeals preferred by respondent nos.1 & 2.

2.

The Appeal came to be admitted on 24/09/2008

and the following questions of law were framed.

1.

Whether CESTAT is right in law in setting aside penalties

of Rs. 5,00,000/- imposed on Kamal K. Singhania under Rule 26

of the Central Excise Rules, 2002 as also Rs. 1,00,000/- imposed

under Rule 26 of the Central Excise (No.2) Rules, 2001/Central

Excise Rules, 2002 read with Rule 209A of the Central Excise

Rules, 1944.

2.

Whether CESTAT is right in law in

i) setting aside central excise duties of Rs.4,16,73,971/- and

Rs.2,17,005/- levied under section 11A(2) of the Central

Excise Act, 1944 on account of clandestine removal of

processed fabrics.

ii)reducing equal penalty imposed under section 11AC of

the Central Excise Act, 1944 from Rs. 4,30,85,195/- to Rs.

3,00,000/- inspite of confirming / sustaining central excise

duty of Rs. 11,94,219=20.

iii) setting aside find/penalty of Rs. 4,28,68,190/- imposed

under section 34 of the Central Excise Act, 1944 and Rule

25(1) of the Central Excise (No.2) Rules, 2001 / Central

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38. CEXA 104.08.doc

Excise Rules, 2002 read with Rule 173Q(1) of the Central

Excise Rules, 1944.

iv) setting aside fines of Rs. 8,00,000/- and Rs. 90,000/-

imposed under section 34 of the Central Excise Act, 1944

being an option given to pay find in lieu of confiscation.

v) setting aside interest levied under section 11AB of the

Central Excise Act, 1944.

vi) setting aside penalty of Rs. 3,00,000/- imposed under

Rule 25 of the Central Excise rules, 2002.

3. Whether the order of CESTAT setting aside central excise

duties, interest, penalties, confiscation as also reducing penalty

under section 11AC of the Central Excise Act, 1944 was based

on no evidence or partly relevant or partly irrelevant evidence

and is otherwise perverse, arbitrary and vitiated in law ?

4.

Whether CESTAT is right in law in setting aside penalty of

Rs. 35,000/- imposed on S.P. Thakkar Transport Company under

Rule 26 of the Central Excise Rules, 2002 as also Rs.

40,00,000/- imposed under Rule 26 of the Central Excise (No.2)

Rules 2001 / Central Excise Rules 2002 read with Rule 209A of

the Central Excise Rules, 1944 ?"

3.

This Appeal was to be heard along with Central

Excise Appeal No. 261 of 2007.

4.

The facts in brief are that respondent no.2 who

was earlier called Indo Green Textiles Pvt. Ltd. was engaged

in the processing of Man Made Fabrics classifiable under

Sections 54 and 55 of the First Schedule of the Central Excise

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38. CEXA 104.08.doc

Tariff Act, 1985. Its factory premises was put to search on

21/05/2002 which resulted in seizure of d