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2015 DIGILAW 75 (GUJ)

Commissioner of Central Excise v. P. J. Varghese

2015-01-21

R.P.DHOLARIA, V.M.SAHAI

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JUDGMENT V.M. Sahai, J. 1. Heard Mr. Y.N. Ravani, learned counsel for the appellant and Mr. I.H. Syed, learned counsel for the respondent. While admitting this appeal on 09.07.2009, the Court had formulated the following substantial questions of law: "(i) Whether, in the facts and circumstances of the case, the Hon'ble CESTAT was justified in applying the ratio of the decision in the case of M/s. Steel Tubes India Ltd. And M/s. AIA Engineering Ltd., when the facts in both these cases were entirely different? (ii) Whether the Hon'ble CESTAT was justified in passing a nonspeaking order? (iii) Whether the Hon'ble CESTAT was justified in allowing the Appeal of the respondent by exercising the discretion in favour of the respondent though the respondent had committed fraud by deliberate and conscious act to defraud the legitimate revenue of the appellant? (iv) Whether, in the facts and circumstances of the case, Shri P.J. Varghese can be considered to have not dealt with the goods which he knew or had reason to believe that the same were not liable to confiscation? (v) Whether Shri P.J. Varghese, who had purchased iron and steel scrap from local dealers and Cenvatable invoices from M/s. New Asiddhi Vinayak ReRolling Mills and issuing his own Cenvatable invoices, can be considered to have not dealt with the goods?" 2. In these Tax Appeals, the Additional Commissioner on 23.5.2007 passed the following order. "(i) I confirm the demand for central excise duty of Rs. 6,31,091/- (Rupees six lakhs thirty one thousand ninety one only) against M/s. Gray Cast foundry Works under proviso to Section 11A(1) of the Central Excise Act, 1944 read with Rule 12 of the Cenvat Credit Rules, 2001 and Rule 12 of the Cenvat Credit Rules, 2002, however, since the said amount of Rs. 6,31,091/- had already been paid, I, therefore, order appropriation of the said amount towards the aforesaid amount of duty so confirmed. I further direct that M/s. Gray Cast Foundry works shall pay interest at appropriate rates under Section 11AB of the Central Excise Act, 1944 on the aforesaid amount of Rs. 6,31,091/- from due date till its final payment at the prescribed rate. (ii) I Impose penalty of Rs. I further direct that M/s. Gray Cast Foundry works shall pay interest at appropriate rates under Section 11AB of the Central Excise Act, 1944 on the aforesaid amount of Rs. 6,31,091/- from due date till its final payment at the prescribed rate. (ii) I Impose penalty of Rs. 6,31,091/- on M/s. Grey Cast Foundry Works under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise (No. 2) Rules, 2001, Rule 25 of the Central Excise Rules, 2002 read with Rule 12 and Rule 13 of the Cenvat Credit Rules, 2001 and Cenvat Credit Rules, 2002: (iii) I also impose the following penalties on the other co-noticees under Rule 26 of the Central Excise (No. 2) Rules, 2001 and Rule 26 of the Central Excise Rules, 2002: (a) Shri Raman Binjraj Agrawal : Rs. 2,00,000/- (Rupees two lakhs only) (b) Shri Pottakerry Joseph Varghese : Rs. 2,00,000/- (Rupees two lakhs only) (c) Shri Aftab Shabbir Khandwawala : Rs. 2,00,000/- (Rupees two lakhs only) (d) Shri Shri Nadeem J. Vakil: Rs. 2,00,000/- (Rupees two lakhs only) (e) Shri Sabirbhai Mohammadali Vasaya : Rs. 2,00,000/- (Rupees two lakhs only)" The CESTAT has allowed the appeal and set aside the penalty against the assessee. The order of the CESTAT is challenged by the Revenue in these tax appeals. A Division Bench of this Court in the case of CCE & C v. Stovec Industries Ltd. [2012] 37 STT 274/26 taxmann.com 157 held that in view of instruction dated 17.8.2011, tax appeal below Rs. 10 lakh is not maintainable and this instruction also applies to the pending appeal. Following the aforesaid decision of the Division Bench, we dismiss these tax appeals as not maintainable. Accordingly, the questions of law posed in this appeal are answered in favour of the assessee and against the revenue.