KALRA FORGING & ALLOYS PVT. LTD. Vs. COMMR. OF C. EX.
LAWS(CE)-2015-2-39
CUSTOMS EXCISE AND GOLD(CONTROL) APPELLATE TRIBUNAL
Decided on February 05,2015

Kalra Forging And Alloys Pvt. Ltd. Appellant
VERSUS
COMMR. OF C. EX. Respondents

JUDGEMENT

Ashok Jindal, J. - (1.)THE appellant is in appeal against the impugned order wherein the penalty under Section 11AC of Act imposed on the appellant. The brief facts of the case are that the appellant is engaged in the manufacture of forged, rolls, gears, shafts and cranks. They procured one purchase order from M/s. Mid India Power & Steel Ltd. for supply of these goods against EPCG licence which were endorsed in the name of the appellant. The appellant cleared the goods on the basis of EPCG licence without payment of duty. The appellant were filing regularly their ER -1 returns showing their clearance without payment of duty against EPCG licence in question. Later on, on information, the investigation was conducted and it was found that the appellant was not entitled to clear the goods against EPCG licence as these certificates are not against the international competitive bidding. Therefore, the appellant was not for the benefit of clearance on their final products against EPCG licence without payment of duty. The appellant were directed to pay duty which the appellant paid along with interest before issuance of show cause notice. Later on a show cause notice was issued to the appellant for appropriation of duty along with interest already paid and for imposition of penalty under Section 11AC of the Act. The adjudicating authority considering the facts that on pointing out by the department, the appellant has paid duty along with interest. Therefore, as per provisions of Section 11A(2B) of Central Excise Act, 1944 read with Board's Circular No. 137/167/2006 -CX -04, dated 3 -10 -2006, the show cause notice was not required to be issued. In the circumstances, penalties were dropped.
(2.)THE Revenue appealed against the order dropping of penalty by the adjudicating authority before the Commissioner (Appeals) who accepted their appeal and imposed penalty on the appellant. Aggrieved by the said order, the appellant is before me.
The contention of the learned Counsel for the appellant is that the appellant were clearing the goods on the strength of EPCG licence endorsed in the name of the appellant by their buyer with the direction that no duty is payable on the final products. This intimation, they have given to the department through ER -1 returns filed regularly shown clearance without payment of duty on the strength of EPCG licence. In these circumstances, when they have paid duty along with interest on pointing out by the department, show cause notice was not required to be issued. Consequently, the penalty is not imposable on the appellant.

(3.)ON the other hand, learned AR opposes the contention of the learned Counsel for the appellant that the appellant are clearing the goods by claiming exemption but they have not disclosed under which notification they are claiming exemption. Therefore, the same amounts to suppression of facts. He further submits that the fact of non -payment of duty came to knowledge of the department at the time of investigation, if the investigation could not have taken place, the detection could not have come out. Therefore, the penalty is rightly imposable on the appellant. He further submits that ER -1 return cannot be relied on as they have not mentioned under which notification they are claiming exemption.
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