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TAXAP/284/2009 5/ 5 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 284 of 2009
=========================================
COMMISSIONER
- Appellant(s)
Versus
POLYCAB
WIRES PRIVATE LIMITED & 1 - Opponent(s)
=========================================
Appearance
:
MS AMEE
YAJNIK for
Appellant(s) : 1,
None for Opponent(s) : 1 -
2.
=========================================
CORAM
:
HONOURABLE
MR. JUSTICE K.A.PUJ
and
HONOURABLE
MS. JUSTICE H.N.DEVANI
Date
: 15/09/2010
ORAL
ORDER
(Per
: HONOURABLE MR. JUSTICE K.A.PUJ)
1. Commissioner
of Central Excise and Customs, Vapi has filed this Tax Appeal under
section 35G of the Central Excise Act, 1944 proposing to formulate
the following substantial questions of law for determination and
consideration of this Court:-
Whether
in the facts and circumstances of the case, Learned CESTAT is
justified in the eye of law to re-calculate the demand of duty &
Interest after applying of normal period of limitation, instead of
confirmed demand under Section 11A(2) of the Central Excuse Act,
1944 & chargeable Interest on the confirmed demand under Section
11AB of the Central Excise Act, 1944, as leviable on the goods
supplied by the respondent to MSEB & WBSEB during the period
2000-01/2001-02?
Whether
in the facts and circumstances of the case, Learned CESTAT is
justified in the eye of law in set-a-side of the mandatory equal
penalty which has been imposed on the respondent under Section 11AC
of the Central Excise Act, 1944?
2. Heard
Ms. Amee Yajnik, learned Standing Counsel appearing for the appellant
and perused the orders passed by the authorities below.
3. The
brief facts giving rise to the present Tax Appeal are that the
respondent assessee is engaged in the manufacture of electric wires
and cables falling under Chapter 85 of the Central Excise Tariff Act,
1985. The dispute is in relation of supply of wires to M/s.
Maharashtra State Electricity Board (MSEB) and M/s. West Bengal State
Electricity Board (WBSEB) by availing the benefit of exemption
Notification No.108/95-CE. The said Notification exempts goods
supplied to projects which are financed by the World Bank, the Asian
Development Bank or any international organisation, subject to
fulfillment of conditions enumerated therein. One of the conditions
is that duty exemption certificate will be issued from the
appropriate officers of the project and countersigned by the
Principal Secretary. Such exemption certificate was issued by the
Technical Director and empowered officers of MSEB and countersigned
by the Principal Secretary to the Government of Maharashtra and the
same was produced on record certifying that the said
equipments/materials were intended for use by MSEB in the above
projects. The said projects were financed by Japan Bank of
International Co-operation. It is also mentioned in the said
certificate that the same was being issued as per requirement under
the Notification No.108/95-CE dated 28th August, 1995.
Similar certificates were issued by the West Bengal State Electricity
Board signed by Chief Engineer and empowered officer and
countersigned by the Principal Secretary from the Department of
Power, Government of West Bengal. Based on the said certificates,
the respondent availed the benefit of the Notification, after duly
filing classification list. RT-12 returns were also filed, which were
assessed by the appropriate officers.
4. Despite
these facts, proceedings were initiated against the respondent by way
of issuance of show-cause notice dated 29th April, 2002
alleging that Japan Bank for International Co-operation is not an
international organisation in terms of the explanation attached to
Notification No.108/95-CE and as such, projects financed by the said
Bank are not entitled to duty-free goods and as such, benefit of
Notification No.108/95-CE cannot be extended to the respondent.
Accordingly, demand was raised for the period 2000-01 and 2001-02.
The said show-cause notice has culminated into the order passed by
the Commissioner confirming demand of duty of Rs.50,96,621/-
alongwith interest and imposition of identical amount of personal
penalty.
5. This
order was challenged in appeal before the Tribunal. Initially, there
was difference of opinion amongst the Technical Member as well as the
Judicial Member. Therefore, the matter was referred to the third
Member. The third Member, vide his order, held that the bonafides of
the respondent could not have been doubted once the certificate was
signed by the specified authority who requested the jurisdictional
Assistant Commissioner to allow the exemption. The third Member of
the Tribunal has also taken note of the fact that the respondent was
supplying to other Government authorities where no such fault was
found. It was also noticed that the fact that the Japan Bank of
International Co-operation was not an international organisation
approved duly in terms of the explanation attached to Notification
No.108/95-CE was not readily forthcoming by any records to which the
respondent had access and, therefore, he was dependent upon the
project implementing authority and the Secretary to the State
Governments who were in the better know of the facts. It is also
observed that the existence of the certificate is not being denied in
the show-cause notice and the Order-in-Original. Considering all
these facts, the third Member had come to the conclusion that the
finding recorded by the Member (Judicial) in respect of issues
forming difference of opinion is just and proper and accordingly the
directions issued to the effect that the demand of Rs.50,96,621/-
plus interest is to be recalculated applying normal period of
limitation and equivalent penalty under section 11AC on the
respondent assessee was liable to be set aside.
6. We
have considered the submissions made by Ms. Yajnik and also gone
through the orders passed by the authorities below. The Tribunal as a
matter of fact found that the there was no suppression of facts and
hence, the conditions precedent under section 11AC for the purpose of
levy of penalty are not satisfied and hence, the Tribunal is
justified in setting aside the penalty levied under section 11AC of
the Act as well as issuing the direction to recalculate the demand
alongwith duty and interest by applying normal period of limitation.
We do not find any infirmity in the order passed by the Tribunal nor
is there any substantial question of law and hence, we dismiss this
appeal.
(
K.A. Puj, J. )
(
Harsha Devani, J. )
hki
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