The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the show cause notice (SCN) for imposing a penalty for non-payment of Customs Duty on the clearness of goods on the ground of Limitation.
Punj Brothers Limited, the appellant assessee was a limited company engaged in the manufacture of M.S. Rounds, and the assessee and Lal Punj Brothers are related persons in terms of Section 4 of the Central Excise Act, 1944 as they have common Directors therefore, the valuation of the goods cleared by the assessee to the related person should be under Rule 8 of the Central Excise Valuation Rules, 2000, at the rate of 115% of the cost of production.
The assessee appealed against the order passed by the Commissioner for confirming the demand of Customs Duty for non-payment of duty by the assessee.
Sudeep Singh Bhangoo, the counsel for the assessee contended that there was no contravention of Rules 8 and 9 of the Central Excise Valuation Rules as they specifically are attracted only when the buyer and seller are related and not only by the virtue of they being inter-connected undertakings.
Further submitted that there was no short payment and as such there was no need for payment of penalty and interest and the decision made by the Commissioner was not as per the law and liable to be deleted.
Rajeev Gupta and Narinder Singh, the counsels for the department relied on the decisions made by the lower authorities and contended that the penalty imposed to the assessee was as per the law and liable to be sustained.
The Bench observed that the department had failed to show that both the units have mutuality of interest as per the provisions of sub- clauses (ii), (iii), and (iv) of Rule 8/Rule 9 of Valuation Rules, and the extended period could not have been invoked and show-cause notice should not have been issued for a longer period.
The two-member bench comprising S.S Garg (Judicial) and Anjani Kumar (Technical) quashed the penalty imposed on the assessee while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
