ORDER
T.K. Jayaraman, Member (T)
1. The appellants have filed this ROM application for modification of Final Order No. 263/2005, dated 28-2-2005.
2. Shri B.V. Kumar, learned Advocate appeared for the petitioners and Shri Ganesh Havanur, SDR for the Revenue.
3. The learned Advocate pointed out that in the Final Order, it has been established that the appellant’s Company and M/s Index Informatics (P) Ltd., are related. It has been ordered that the duty should be computed on the basis of price at which M/s Index Informatics (P) Ltd., sold the goods. It has also been ordered that the penalty under Section 11AC will be re-quantified after calculating the duty liability for the period from 28-9-96 to 15-6-97. Further consolidated penalty under Rules 9(2), 173Q and 226 is reduced to Rs. 25,000/-.
4. The learned Advocate submitted that there is a mistake apparent on the record in the Final Order as far as the imposition of consolidated penalty of Rs. 25,000/- under Rules 9(2), 173Q and 226 of the Central Excise Rules, 1944 is concerned for the following reasons :-
(i) Once it is held in the Final Order that the words ‘Mktd. by INDEX Informatics (P) Ltd., does not indicate the brand name, the applicants are entitled to the benefit of SSI exemption under Notification No. 1/92-C.E., dated 28-2-93 and 16/97-C.E., dated 1-4-97.
(ii) Even adopting the value at which the applicants cleared the goods to the persons other than M/s. Index Informatics (P) Ltd., the total value of the clearances of the impugned goods during the material period i.e., 1-4-96 to 31-3-97 and 1-4-97 to 16-6-97, were Rs. 26,08,233/- and Rs. 10,67,138/-, respectively, which is an admitted fact in the impugned Show Cause Notice. Therefore, the total value of the clearances made by the applicants during the material period are well within the value stipulated under Notification No. 1/92-C.E., dated 28-2-93 and 16/97-C.E., dated 1-4-97 and are exempted. In other words, there will not be any duty liability on the applicants in the present case.
(iii) The above clearly establish that the applicants have not contravened any provisions of Central Excise Act, 1944 or Rules made thereunder, and therefore the imposition of consolidated penalty of Rs. 25,000/- is not called for.
(iv) Even otherwise, it is now settled law that once the demand for duty is not sustainable, the imposition of penalty also fails.
In view of the above, there was a prayer to rectify the error suitably. The learned Advocate relied on the decision of the Supreme Court in the case of M.K. Venkatachalam, ITO v. Bombay Dyeing wherein it has been held that Mistake apparent from the covers all mistakes discoverable from a perusal of whole, evidence in the case. It may be a mistake either of law or fact.
5. We have carefully considered the submissions. In view of the fact that the total value of the clearance made by the appellants are claimed to be well within the exemption limit, the question of penalty should have been left open. Hence there is an error apparent on record in the Final Order. We rectify the error by deleting the following sentences in Para 9 at Page No. 4 of the Final Order:
The penalty under Section 11AC will be the re-quantified duty liability for the period from 28-9-1996 to 15-6-1997. The consolidated penalty under Rules 9(2), 173(Q) and 226 is reduced to Rs. 25,000/-. The OIA is modified to this extent. The original authority should compute the duty liability as per directions above. The appeal is disposed of in the above terms.
And substituting the same with the following sentences :
If on the above basis, the duty liability is nil then no penalty would be leviable. In case any duty liability is there, suitable penalties should be imposed. Therefore, the matter is remanded to the Original Authority to re-quantify the duty liability. The question of imposition of penalties is kept open. The appeal is disposed of in the above manner.
6. ROM is allowed in the above terms.
(Pronounced in the open Court on 8-9-2005)