SWARAJ MAZDA LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) RELEVANT facts of the case, in brief, are that the appellants are engaged in the manufacture of motor vehicles and chassis fitted with engines and parts classifiable under Chapter heading 8702, 8704 & 8706 of the first schedule to the Central Excise Tariff Act, 1985. Show cause notice was issued proposing demand of duty for the period 1.4.04 to 30.9.04 on the ground that the appellant cleared the final products to their Spare Parts Division (SPD) for further sale to the dealers of SPD. On scrutiny of the records, it was found that the SPD sold the goods on higher value than the value on which the final products was transferred on payment of duty from the factory of the appellants. The original authority confirmed the demand of duty of Rs. 33,111/ - and appropriated the amount of Rs. 31,227/ - as deposited by them and also imposed penalty of Rs. 1500/ - under Rule 25 of the Rules. Revenue filed the appeal before the Commissioner (Appeals) for imposition of minimum penalty of Rs. 10,000/ - as prescribed under Rule 25 of the Central Excise Rules, 2002. Commissioner (Appeals) enhanced the penalty from Rs. 1500/ - to Rs. 10,000/ -. Hence, the appellants filed this appeal.

(2.) AFTER hearing both sides and on perusal of the records, I find that the Larger Bench of the Tribunal in the case of Commissioner of Central Excise, Bhopal v. Rama Wood Craft (P) Ltd., 2008 (225) ELT 348 (Tri -LB) held that there is no minimum penalty prescribed under Rule. Learned DR contends that it is a clear case of removal of goods in higher value which was detected by Central Excise officers. Therefore, the minimum penalty of Rs. 10,000/ - imposed by the Commissioner (Appeals) is justified. He further, submits that the Larger Bench of the Tribunal also held that penalty would be imposed as per facts and circumstances of the case after considering the nature and gravity of the offence.

(3.) IN view of the above decision of the Tribunal, in the case of Rama Wood Craft (supra) the order of the Commissioner (Appeals) cannot be sustained and accordingly the same is set aside. The order of the original authority is restored. The appeal filed by the appellant is allowed with consequential relief.