C.P. CHINNASAMY Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THESE two appeals are directed against Order -in -Appeal Nos. 128 -129/2003 in which the ld. Commissioner (Appeals) has upheld the order of lower adjudicating authority and rejected their appeal except modifying the penalty from Rs. 5,000/ - to Rs. 2,000/ -imposed on the company secretary of the company.

(2.) AGGRIEVED by this order, the appellants have come in appeal and have stated that since the duty has been paid before issue of show cause notice, no penalty under Section 11AC of the Central Excise Act can be imposed on them.

(3.) APPEARING on behalf of the appellants, ld. Counsel Shri R. Raghavan submits that in view of the judgment rendered by the Northern Regional Bench in the case of Amritsar Crown Caps (P) Ltd. v. CCE, Chandigarh reported in 2002 (140) E.L.T. 437 (Tri. - Del.), no penalty and interest under Section 11AC and under Section 11AB respectively of the Central Excise Act, 1944 can be imposed on the manufacturer. He has cited number of judgments including the judgment rendered by this Bench in the case of Ashok Leyland Ltd. v. CCE Chennai, 2003 (156) E.L.T. 995 (Tri. - Chennai) wherein it was held that allegation of suppression, fraud etc. are immaterial and penalty and interest under Section 11AC and Section 11AB of the Central Excise Act, 1944 are not imposable. Ld. Counsel also submitted that the Secretary of the company is in -charge of the administrative affairs of the company and he does not look after day -to -day affairs of the company about Central Excise matters and, therefore, no penalty under Section 209A can be imposed. Ld. Advocate also submitted that even if it is held that penalty is imposable, it cannot be equivalent to the duty amount as has been held by the Apex Court in the case of State of Madhya Pradesh v. Bharat Heavy Electricals, 1998 (99) E.L.T. 33 (S.C.). He also invited our attention to the judgment rendered by the Madras High Court in the case of CCE Trichy -I v. CEGAT Chennai, reported in 2001 (133) E.L.T. 536 (Mad.) = 2001 (47) RLT 383 (Mad.) wherein the Hon'ble High Court has held that penalty provided in Section 11AC is the maximum and CEGAT has discretion to reduce it. He also invited our attention to the judgment rendered by the Tribunal in the case of Escorts JCB Ltd. v. CCE, New Delhi, 2000 (118) E.L.T. 650 wherein the penalty under Section 11AC was reduced from Rs. 30,53,751 to Rs. 10,00,000/ -. Ld. Advocate also invited our attention to the judgment rendered by Eastern Bench, Calcutta vide Order No. A -721/KOL/2002, dated 27 -6 -2002 in the case of Indian Oil Blending Ltd. v. CCE Kolkata -I wherein the duty involved was Rs. 44,36,159/ - and penalty was reduced to Rs. 4 lakhs imposed under Section 11AC by following the ratio of the Tribunal's decision in the case of Escorts JCB Ltd v CCE, New Delhi (supra).