indo Swiss Embroidery Inds and Vs. Commissioner of Central Excise - Court Judgment

Excerpt:

.....cast a liability on the officers to check the various imports of duties. the verification is only to be as regards description of the products, manufacturing process & correctness of classification & applicability of notification claimed. these issues are not in dispute.2.5. in this view of the matter the duty demand of rs. 623478/ as arrived is confirmed.2.6. since the goods have been removed in contravention of rule 173q(1)(a)&(d) as arrived by the lower authorities, the penalty of rs. 1 lakh imposed under rule 173q(1) is upheld.2.7. there is no confiscation liability arrived at under rule 173q(1) or alleged. therefore the penalty under rule 209a on the director cannot be upheld. the reasons as arrived for the penalty by the lower authorities cannot be upheld to call for penalty under rule 209a.penalty as imposed is set aside & directors appeal to be allowed in full.2.8. the penalty under section 11ac equivalent to the 100% mandatory has been arrived without disclosing why the discretion to impose less than that or to be kept at that level in the order impugned. this was required in view of the s.c.'s decision in case of state of madhya pradesh v. bhel . the.....

Judgment:

1.1. Appellants are a manufacture of embroidery in the piece, strip or in motifs, classified under S.H.5805.19.

1.2. Initially they had claimed classification under 5804.11, 5804.12, 5804.19 & 5804.11 & 5805.19. They cleared the products under 5804.11 and from 20/8/98, they cleared the same and cleared them under 5805.19.

They however did not discharge the duty levy obligations under the Additional Excise Duty (Textile & Textile Articles) Act 1978 (hereinafter referred to AED (TTA).

1.3. Demands of duty under AED (TTA) were made vide a notice dtd 24/1/02 for the period Jan 98 to Mar 2000. The same was contested on time bar. However the lower authorities rejected the plea and determined the duty demands and imposed 100% mandatory penalty under Section 11AC and penalty of Rs. 1 lakh under Rule 173Q(1). A penalty under Rule 209A was arrived under Rule 209A on the assessees Director.

Hence these appeals 2.1. Heard both sides. The levy under AED (TTA) is not contested. The contest is only on time bar and no penalty could be imposed under the Act and the Rules.

2.2. Considering the plea of time bar, it is found that in the grounds of appeal as filed by the assessee, in para 04, it is the case of the assessee that - ... Only error in the classification declaration was for having not shown the chargeability of duty of AED (TTA) to their products. The said error was on feeling that the rates of duty shown in the Tariff Book, were only leviable. Appellants were not aware of existence of Additional Duties of Excise (Textile & Textile Articles) Act, 1978....

In this view of the pleading, & ignorance of law being no excuse cannot bestow the benefit of time bar on the assessee, when it is found that they were required under the law to determine and assess the duty levied themselves and pay the same before removal of the excisable goods.

2.3. A perusal of the grounds taken, the decisions relied, will not help the assessee to invoke the bar of time bar to be upheld. The various decisions relied are for the period when the law required the assessee to file and get classification lists and Price lists approved by the Assistant Commissioner. After the abolishing of the approvals of these lists, a greater responsibility devolves on the assessee to determine the levy and discharge the same. The plea of time bar as urged in the grounds herein cannot absolve them of the liability of mis-stating the levy & determination correctly thereafter the duty.

2.4. The reliance on Boards instructions Circular no 124/35/95-CX dtd 10/5/95 especially paras 5 &6 therefore, which was strongly relied upon by the Ld. Advocate for the appellants will not assist the plea of bar of limitation to be upheld as a close reading of the Circular reveals that it does not cast a liability on the officers to check the various imports of duties. The verification is only to be as regards description of the products, manufacturing process & correctness of classification & applicability of notification claimed. These issues are not in dispute.

2.5. In this view of the matter the duty demand of Rs. 623478/ as arrived is confirmed.

2.6. Since the goods have been removed in contravention of Rule 173Q(1)(a)&(d) as arrived by the lower authorities, the penalty of Rs. 1 lakh imposed under Rule 173Q(1) is upheld.2.7. There is no confiscation liability arrived at under Rule 173Q(1) or alleged. Therefore the penalty under Rule 209A on the Director cannot be upheld. The reasons as arrived for the penalty by the lower authorities cannot be upheld to call for penalty under Rule 209A.Penalty as imposed is set aside & directors appeal to be allowed in full.

2.8. The penalty under Section 11AC equivalent to the 100% mandatory has been arrived without disclosing why the discretion to impose less than that or to be kept at that level in the order impugned. This was required in view of the S.C.'s decision in case of State of Madhya Pradesh v. BHEL . The order of penalty if any, under Section 11AC is set aside & that matter is remitted to the original authority to redetermine the same, after hearing the appellants.

2.9. Appeal of assessee is therefore partially allowed in terms of above findings.