CFOOOOo6787b' . 4^-^:.- ,c^ i'?-" ^"' ^^ '.Vfc?^ IN THE HIGH COURT OF y-^ ^fr ^ JUDICATURE AT BILASPUR CCHHATTISGARH) TAX CASE N0. 5~ OF 2008 J APPELLANT UNION OF INDIA THROUGH COMMISSIONER, CENTRAL EXCISE AND CUSTOMS, CENTRAL EXCISE BHAWAN, DHAMTARI ROAD, TIKARAPARA, RAIPUR (C.G.) 492-001 Versus RESPONDENT M/S AJANTA PAPER AND BOARD MILLS, VILLAGE - UMARIA, P.0.- REEWA ,RAIPUR (CG) THROUGH PARTNER SHRISANJAY MEGHANI APPEAL UNDER SECTION 35-G OF THE CENTRAL EXCISE ACT. 1944: 'SS^W:-V!^isws-3'?S%-eSS.iaiE ^ HIGH COURT OF CHHATTISGARH AT BILASPUR Division Bench : Hon'ble Shri Satish K. Agnihotri & Hon'ble Shri Rangnath Chandrakar, J.J. TAXCASE No.51of2008 : Union oflndia. VERSUS : M/s. Ajanta Paper And Board Mills. AND TAX CASE No. 55 of 2008 APPELLANT : M/S. Ajanta Paper and Board Mills, APPELLANT RESPONDENTS ^p^ /r-f'-i0 b^ RESPONDENTS VERSUS : The Commissioner, Centa-al Excise & Custom, Raipur, Chhattisgarh & 1 other. Order for consideration Hon'ble Shri Rangnath Chandrakar, J. °) ct-y-t-e^B- Sd/- (S-ll-2010 Sd/- -3-augcr'—- [^ -11-2010 f^ Post for pronouncement ofthe order on l^ day ofNovember, 2010 Sd/- Satish K. Agnihotri Judge ,^3^.. /'sr""%, "^ S ' ftte?c». 1 1\^°4^ mOH COURT OF CHHATTISGARH AT BILASPUR Division Bench : Hon'ble Shri Satish K. Agnihotri & Hon'ble Shri Rangnath Chandrakar, J.J. APPELLANT RESPONDENT TAX CASE No. 51 of2008 : Union oflndia. VERSUS : M/s. Ajanta Paper And Board Mills. Present: Shri Bhishma Kinger, Advocate for the appellant. Shri R.K.Mishra, Advocate for the respondent. & TAX CASE No. 55 of 2008 APPELLANT : M/S. Ajanta Paper and Board Mills. RESPONDENTS VERSUS : The Commissioner, Central Excise & Custom, Raipur, Chhattisgarh & 1 other. Present: Shri R.K.Mishra, Advocate for the appellant. Shri Bhishma Kinger, Advocate for the respondent. APPEAL UNDER SECTION 35CG') OF THE CENTRAL_EXC!SEACT,,1944 JUDGMENT & ORDER (Delivered on this /^"^layofNovember, 2010) Per Satish K. Agnihotri, J. 1. In both the above stated cases, appeal has been filed by the Union of India (hereinafter referred to as 'the Revenue'), and M/s. Ajant Paper & Board Mills (hereinafter referred to as 'the assessee), respectively, against fhe Final Order No. 288/2008-SM(BR) dated 08.02.2008 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi in Appeal No. E/3852/2005-SM(BR) (Annexure A/l to TaxCaseNo. 51/2008). 2. The appeal of the revenue was admitted on the following substantial questions oflaw: "a) Whether the leamed Appellate Tribunal has erred in modifying the order-in-original dated 31.03.2005 of the adjudicating authority by reducing the penalty under section 1 TAC to 25% ofthe duty amount? b) Whether on the facts and circumstances of the case, penalty equal to the amount of duty, under the provisions of Section 11AC ofthe Central Excise Act, 1944 is imposable on the respondent? " The appeal ofthe assessee was admitted on the following substantial questions oflaw: "1. Whether fhe assessee is competent to raise new points which have admittedly not been raised before the Commissioner (Appeals) Central Excise? 2. Whether the Commissioner was under an obligation to examine the facts ofthe case under the provisions of Section 105 and 110 of the Customs Act, 1962 which are applicable to the provisions of the Central Excise Act, 1944 by notification No. 68/63 dated 4.5.1963, particularly when the issues were not raised by the assessee?" The brief facts, in nutshell, are that the assessee i.e. M/s, Ajanta Paper & Board Mills, Umariya, Raipur, is engaged in manufacture ofKraft papers. On 11.02.2004, the Central Excise officers conducted preventive checks and enquiries. Durtng the course of preventive checks and enquiries, the officers recovered few private records maintained by the assessee wherein it was found that the assessee has concealed production of442.41 241 M.T. ofKraft Paper valued at Rs. 55,28,013/- involving Cenfa-al Excise Duty of Rs. 4,42,241/- . Thereafter, a show cause notice bearing No. C.No.IV(6)DSTT/IPM/39/2003/P/24685 was issued on 19.11.2004 (Annexure A/2 to Tax Case No. 51/2008) callingupon the assessee to reply to the show cause for imposition of duty to the tune of Rs. 4,42,241/- under the provisions ofsection 11A ofthe Central Excise Act, 1944 (hereinqfter referred to as 'the Act, 19.44') and further, penalty under Section 11AC ofthe Act, 1944 read with Rule 25 ofthe v\ Central Excise Rules, 2002 by the Deputy Commissioner, (Prev.), Raipur. After hearing the assessee, the Deputy Commissioner confirmed the demand ofRs. 4,42,241/- as duty under the provisions of Section 11A of the Act, 1944 and a penalty of equal sum under section 11AC of the Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, and imposed the same vide order dated 31.03.2005 (Annexure A/3 to Tax Case No. 51/2008) . Thereagainst, the asessee preferred an appeal with the Commissioner (Appeals), Raipur. The Commissioner, (Appeals), by order 27.09.2005 (Annexure A/5 to Tax Case No. 51/2008) came to fhe conclusion that "the investigation has failed to bring out evidences to establish the allegations of clandestine production and removal of the goods from the appellant's factory. The only document in the fonn of 'production reports' is not a evidence of clandestine manufacture and removal in absence of any corroboratory evidence. Not even a single instance of clandestine removal ofgoodsor intention of clandestine removal or evasion of duty has been brought on record. No evidence is available in the form ofvariation in the stock offinished goods or raw materials or inputs. The appellant at any stage of investigation did not admit any allegation ad explanations submitted by them were never contradieted by the investigators nor contrary evidence have been brought on record. The investigators totally failed to discharge their onus to prove the allegation. I am therefore of the view that the allegations are not established and impugned order is not sustainable . Thus, the order dated 31.03.2005, passed by the Deputy Commissioner was set aside and the appeal was allowed with consequential reliefs. ,f c!T.-^ 1 ss^. & ri4t 7. Thereagainst, the revenue filed an appeal before the Custom, Excise & Service Tax Appellate Tribunal (hereinafter referred to as 'the Tribwal'). The Tribunal, by order dated 08.02.2008 (Annexure A/l to Tax Case No. 51/2008 and Amiexure A/5 to Tax Case No.55/2008) set aside the order passed by the Commissioner (Appeals), however, reduced the penalty to the tune of25% ofthe duty as per proviso to section 11AC ofthe Act, 1944. The revenue as well as the assessee have challenged the instant appeals on the above stated questions of law. Shri Kinger, leamed counsel appearing for the revenue submits that reduction of penalty to 25% as prescribed under proviso to section 11AC ofthe Act, 1944 is not sustainable in the eyes oflaw, as the assessee had not paid the duty as per adjudication order dated 09.05.2002 and penalty wifhin 30 days. The assessee paid only 25% of the penalty upon receipt of the adjudication order, The assessee received the adjudication order on 09.05.2005 and made the payment on 6.6.2005. Section 11AC reads as under: "11AC. Penalty for short-levy or non-levy of duty in certain cases. - Where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of ftaud, collusion or any willful misstatement or suppression of facts, or contravention ofany of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) ofsection 11A, shall also be liable to pay a penalty equal to the duty so determined: Provided that where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11AB, is paid wifhin thirty days from the date of communication ofthe order ff €.'• ^ 1 1 ":fte-, s 's.-^^ '^ of the Central Excise Officer determining such duty, the amount ofpenalty liable to be paid by such person under this section be • twenty-five per cent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court,then, for the purpose ofthis section, the duty, as reduced or increased, as the case may be, shall be taken into account: Provided also that in case where the duty determined payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount or duty so increased, the interest payable thereon and twenty-five percent of the consequential increase of penalty have also bee paid within thirty days of the communication ofthe order by which such increase in the duty takes effect. Explanation: - For the removal of doubts, it is hereby declared that: (1) the provisions of this section shall also apply to cases in which the order determining the duty under sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (2) any amountpaidtothe credit ofthe Central Govemment prior to the date of communication ofthe order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person." 8. The first proviso to Section 11AC ofthe Act, 1944 clearly provides that if the duty as determined under sub section (2) of Section 11A, and the interest payable thereon under section 11AB, is paid within ^iSVXas, ^...iK' thirty days from the date of commumcation ofthe order ofthe Central Excise Officer, determining such duty, the amount ofpenalty liableto be paid by such person under this section be 25% of the duty so determined. There is no dispute thaf on receipt of the adjudication order on 09.05.2005, the duty so determined with 25% of the total amount ofthe penalty was deposited on 6.6.2005. 9. The question involved is purely question of facts asto whether the same was deposited within 30 days or not, thus fhe question raised by the assessee in this appeal cannot be held as substantial question of law. Thus, the appeal preferred by the revenue is dismissed. 10. It is well settled proposition of law that the cardinal rule of interpretation is to allow the general words to take their natural wide meaning unless the language ofthe statute gives a different indication or such meaning is likely to lead to absurd results. (See: Assistant Collector ofCentral Excise, Guntur v. Ramdev Tobacco Company). The first proviso to section 11AC of the Act, 1944 is clear, unambiguous and admits ofno other meaning. 11. The appeal ofthe assessee was admitted on the abovestated grounds. It is indisputable that the assessee has not raised the question ofissue ofshow cause notice withia six months ofthe seizure ofgoods under clause (a) ofSection 124 ofthe Customs Act, 1962, as required under sub section (2) ofsection 1 10 ofthe Act, 1962. 12. On pemsal ofthe documents and records, it is found that the assessee has nof questioned the issue of notice, the limitation on the issue of notice at any stage. For the first time, the question has been raised before this Coiirt, in appeal under section 35-G ofthe Act, 1944. ~]<1992)2SCC119 uoposs qns 0} osiAojd (^)oi I uoposg 'pueq uo SSBO sq} m 3iqBoi(ddB Z961 '13V sipj0 011 uopossjo suoisiAOjd 35[Bui o} 'Xirej; 'Stusmnoop i.0 spooS jo smziss suiuiBxa 0} sA^q MOpq sspuoipne aip SE sp^jjo uopssnb sjnd v s; y •^ooe'Ori?! 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"l700Z"II'6I UO pSnSST SBM SOpOU 3SW33 Moqs v "frOOZ'OI'frI uo PUB frOOZ'ZO'II uo psp.ioosj SBM 3SSSSSB sip jo jsuyed sq} jo lusms^is sip }Bq} punoj si }i 'pmiquj, sqi Kq psssBd Mpjo psugndmi sipjo (BSiusd uo •£i (2) ofthe Act, 1962 provides for extension oflimitation on sufficient cause being shown for a farther period not exceeding six months. 15. There is no dispute that section 12 of the Act, 1944 provides for application ofsome ofthe provisions ofthe Act, 1962 by notification in the official gazette. The Central Govemment, by notification dated 04.05.1963, has made section 105(1), 110, 115 (excluding clauses (A) & (E) of sub-section (1), clause 'a' ofsection 118, secfion 119, 120, . 121, 124, clause 'b' ofsub-clause (ii) ofclause 'c' of sub-section (i) ofsection 142 and section 150 ofthe Act, 1962, applicable to the Act, 1944. 16. On examination ofthe provisions ofsection 105(1) ofthe Act, 1962, it appears that the provisions of section 105 of the Act, 1962 is applicable in the case of search of premises, which was done in accordance with law. Section 110 oftheAct, 1962 deals with seizure of goods, document and things and sub section (2) deals with limitation of show-cause-notice i.e. within six months of the seizure of the goods, for retum of the goods to the person fi-om whose possession they were seized. In the case on haad, on pemsal of the show-cause-notice dated 19.11.2004 (Annexure A/2 to Tax Case No. 51/2008), it is found that the preventive checks and enquiries were conducted on 11.02.2004. Thereafter, certain documents and records were presented by Shyam Meghani, partner Of the notice and statement was made. Physical stock ofKraft paper was also verified and Panchnama was prepared on the next date. But it appears that no goods were seized by the officers ofthe revenue and the assessee has not objected to the show cause notice dated 19.11.2004 (Annexure A/2 to Tax Case No. 51/2008) as being issued after a period of six yx ''-•-> . 'tl--. months, in its response, before the adjudication order was passed by the Deputy Commissioner. Thereafter also, at no stage, the issue was raised. For the first time, the assessee is trying to raise the issue which depends on determination of facts asto what records or documents were seized, when the same were seized, wliether section 110 ofthe Act, 1962 would be applicable. Thus, at this stage, the assessee cannot be permitted to raise fhe question of law, as above-stated, as the same is based on disputed facts. 17. Reliance ofthe assessee on several cases are not relevant to the issue involved herein. All other issues were not pleaded at the time of the hearing and the appeal was admitted on the above stated questions of law, as pleaded by the counsel for the assessee, it is not necessary to • go into the same as all the issues involve question offacts which have attained finality at the stage of Tribunal and the above stated appeal are admittedly only on the question of law, which could not be decided for want ofmaterial facts. 18. In view of the analysis as aforestated, the assessee cannot be permitted to raise the substantial question oflaw, on which the appeal was admitted. 19. For the reasons stated hereinabove, both the appeals fail and are dismissed. 20. No order asto costs. Sd7- Satish K. Agnihotri Judge Sd/- R.N. Chandrakar Judge Amit