Case Law Details
Dhanjibhai Bhikhabhai Ranparia Vs C.C.E. & S.T.-Rajkot (CESTAT Ahmedabad)
As regard the appellant M/s. Dhanjibhai Bhikhabhai Ranparia, he is the raw material supplier. The raw material supplier cannot be implicated for clandestine removal of the goods by the buyer of the raw material. Therefore, the penalty on M/s. Dhanjibhai Bhikhabhai Ranparia is not sustainable.
Purchasing Goods without invoice/bill amounts to abatement for evasion of duty – Penalty reduced by CESTAT
As regard other appellants as I discussed above the lapse on their part is that they have purchased goods without proper invoice/bills from M/s. Rainbow Engineering Co therefore, to some extent they are responsible for evasion of duty by M/s. Rainbow Engineering Co. Accordingly, considering the overall facts of the case and the amount of duty involved, I am of the view that the penalty of Rs. 1 Lakh in each appellants is very harsh, therefore, I reduce the penalty from 1 Lakh to 25,000/- each on 4 appellants namely Cosmo Pump, Sai Shereegupta, Gupta Machinery Stores, Geeta Enterprises.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
In these appeals, the appellants have challenged imposition penalty of Rs. 1 Lakh each on the appellants in connection with a case of clandestine removal by M/s. Rainbow Engineering co., against which the demand of Central Excise Duty of Rs. 8,36,530/- was confirmed. In this case there is an order of confiscation of 26 power driven pumps valued of Rs. 1,12,600/- and for redemption of the same of fine of Rs. 30,000/- was imposed.
2. Shri Rahul Gajera, Learned Counsel appearing on behalf of the appellant submits that the issue involved is that whether the pumps cleared by M/s. Rainbow Engineering Co., is not in conformed to the Bureau of Indian Standards (BIS), accordingly not eligible for SSI exemption under Notification No. 8/2003-CE dated 01.03.2003. It is his submission that the condition of notification of BIS certification has no relevance with the present appellants and it is purely question of law which is applicable to M/s. Rainbow Engineering co and for any violation of the notification and wrong availment of Exemption Notification No. 8/2003-CE, the present appellants cannot be penalized. He placed relied upon the following judgments:
- Jaiprakash R. Jalan-2007 (207) ELT 226 (Tri.-Mumbai)
- Govind Agencies Ltd.- 2016 (333) ELT 320 (Tri.- Ahmd.)
3. Shri Rajesh K Agarwal, Learned Superintendent (Authorized Representative) appearing on behalf of the revenue reiterates the findings of the impugned order.
4. I have carefully considered the submissions made by both the sides and perused the records. I find that out of 5 appellants one M/s. Dhanjibhai Bhikhabhai Ranparia, is a raw material supplier and other 4 appellants are buyer of the pumps. M/s. Rainbow Engineering Co have cleared the goods without payment of duty. However, M/s. Rainbow Engineering co had claimed Exemption Notification No. 8/2003-CE, but the pumps cleared by M/s. Rainbow Engineering Co were not having BIS certification. Accordingly, the goods were not eligible for Exemption Notification No. 8/2003-CE. I find that even though the M/s. Rainbow’s submission that they were under bona fide belief of eligibility of the exemption notification, but the case was made out on the basis that M/s. Rainbow Engineering Co., had not issued proper invoice/Bill for sale of their goods. The goods were clandestinely remove on the basis of chits. Though, the present appellants are not concerned about the Exemption Notification No. 8/2003-CE, but by purchasing the goods without invoice/bill abated M/s. Rainbow Engineering Co for evasion of duty. As regard the appellant M/s. Dhanjibhai Bhikhabhai Ranparia, he is the raw material supplier. The raw material supplier cannot implicated for clandestine removal of the goods by the buyer of the raw material. Therefore, the penalty on M/s. Dhanjibhai Bhikhabhai Ranparia is not sustainable. Accordingly, the same is set aside. As regard other appellants as I discussed above the lapse on their part is that they have purchased goods without proper invoice/bills from M/s. Rainbow Engineering Co therefore, to some extent they are responsible for evasion of duty by M/s. Rainbow Engineering Co. Accordingly, considering the overall facts of the case and the amount of duty involved, I am of the view that the penalty of Rs. 1 Lakh in each appellants is very harsh, therefore, I reduce the penalty from 1 Lakh to 25,000/- each on 4 appellants namely Cosmo Pump, Sai Shereegupta, Gupta Machinery Stores, Geeta Enterprises. As a result Appeal No. E/519/2012-SM of M/s. Dhanjibhai Bhikhabhai Ranparia is allowed, other appeals bearing No. E/520/2012-SM (Kasama Pump), E/521/2012(Sai Srinivasa Traders), E/522/2012(Gupta Machinery Stores), E/523/2012 (Sri Geeta Enterprise) are partly allowed in the above terms.
