Case: Ashokkumar H.Fulwadhya, Director of M/S.Harisons Steel Private Limited Vs. Union of India &amp; Others

These petitions are directed against the order dated 4th August, 2009 by the Customs ExciseService Tax Appellate Tribunal, West Zonal Bench, Mumbai ( CESTAT for short) directing the petitioners Mr.Ashokkumar and Mr.Daulatkumar to25% of the penalty imposed on each of them, they being the directors of M/s.Harisons Steel Pvt.Ltd.

Court's reasoning:
In Union of India v. M/s.R.B.Shreeram Durga Prasad (P) Ltd. and ors., 1969 (2) SCR 727 , the Apex Court ruled that a penal provision has to be construed strictly. Considered in this backdrop, in absence of specific words, no person other than the person taking Cenvat credit can be inferred. The relevant provisions of the Central Excise Act, 1944 (Act for short) show that wherever Legislature desired to include any other person or agent, a specific language in that behalf is used. One of such readily referable provision could be proviso toof section 11A, which reads as under:"11A. Recovery of duties not levied or not paid orid or erroneously refunded. (1) When any duty of excise has not been levied or paid or has beenid or erroneously refunded, whether or not suchy oror erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation thereunder, a Central Excise Officer may, within one year from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has beenid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice:Provided that where any duty of excise has not been levied or paid or has beenid or erroneously refunded by reason of fraud, collusion or any willfulor suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, by such person or his agent, the provisions of thisshall have effect, as if for the words one year, the words five years were substituted;" (Emphasis supplied)9.Perusal of the aforesaid proviso would demonstrate that even the agent is brought within the purview of the legislative net. In contrast to the above, rule 13 of the Cenvat Rules brings within its fold only that person who takes Cenvat credit and no other person.