CESTAT Quashes Penalty Imposed on Wilful Suppression with Intent to Evade Excise Duty on ground of Absence of Conclusive Evidence [Read Order]

The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the penalty imposed on wilful suppression with intent to evade excise duty on the ground of absence of conclusive evidence. 

Abharan Jewellers, the counsel for the assessee appealed against the order passed by the Commissioner for the imposition of mandatory penalty against wilful suppression of excise duty for the jewellery of the assessee. 

S. Raghu and B. Hanjir, the counsels for the assessee contended that no demand can be made against them where the products were made by the jobbers out of the materials supplied by them invoking rule 12AA of the Central Excise Rules, 2002. 

Further submitted that the confirmed demands are barred by limitation in as much as the invocation of an extended period of limitation as also the imposition of mandatory penalty under section 11AC of the Central Excise Act,1944 cannot be sustained. 

D. S. Sangeetha and P. Saravana Perumal, the counsels for the department relied on the decisions made by the lower authorities and contended that any mark or symbol, or monogram which was used concerning the product which indicates a connection in the course of trade between the product and some person using such name or mark was to be considered as ‘Brand Name’. 

Also submitted that the goods articles of jewellery sold by the assessee fall within the category of branded jewellery which was liable to excise duty. 

The bench observed that the goods cleared by the appellants are branded goods and they are liable to pay duty as per Rule 12AA of the Central Excise Rules and since no allegation of wilful suppression with intent to evade payment of duty was established from the records the demand was restricted to normal period. 

The two-member bench comprising M. Mishra (Judicial) and R.Bhagya Devi (Technical) held to remand back the matter to the original authorities for re-quantification of the demands for the normal period along with interest and quashed the penalty imposed under section 11AC of the Central Excise Act. 

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