The Ahmedabad Bench of the Customs, Excise & Service Tax Appellate Tribunal (CESTAT)reduced the penalty on clandestine removal from 1Lakh to 25000 purchasing goods without invoice/bill amounts to abatement for evasion of duty.
DhanjibhaiBhikhabhaiRanparia, the appellants have challenged the imposition penalty of Rs. 1 Lakh each on the appellants in connection with a case of clandestine removal by M/s. Rainbow Engineering co., against which the demand of Central Excise Duty of Rs. 8,36,530/- was confirmed. There is an order of confiscation of 26 power-driven pumps valued at Rs. 1,12,600/- and for the redemption of the same a fine of Rs. 30,000/- was imposed.
The question is whether the pumps cleared by M/s. Rainbow Engineering Co., is not in conformed to the Bureau of Indian Standards (BIS) and is not eligible for SSI exemption under Notification No. 8/2003CE dated 01.03.2003. It was argued that the condition of notification of BIS certification has no relevance to the present appellants.
A single-member bench comprising of Mr Ramesh Nair found that out of 5 appellants appellant is a raw material supplier and the other 4 appellants are a buyer of the pumps. M/s. Rainbow Engineering Co has cleared the goods without payment of duty.
Further viewed that though the appellants are not concerned about the Exemption Notification No. 08/2003-CE, by purchasing the goods without invoice/bill abated M/s. Rainbow Engineering Co for evasion of duty. The raw material supplier cannot be implicated inthe clandestine removal of the goods by the buyer of the raw material.
The Court reduced the penalty from 1 Lakh to 25,000/- each on 4 appellants namely Cosmo Pump, Sai Shereegupta, Gupta Machinery Stores, and Geeta Enterprises. The Appeal filed by M/s DhanjibhaiBhikhabhaiRanparia is allowed, other appeals are partly allowed.
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