UNIVERSAL CONSTRUCTION AND Vs. COMMR. OF C. EX.

JUDGEMENT

(1.) SHOW cause notice was issued to M/s Ram Ply Board Industries (P) Ltd. and the appellant herein, inter alia, alleging that the transaction between M/s Ram Ply Board Industries and the appellant herein was not a genuine transaction falling under Section 4(1) (a) because the appellant was only a commission agent. This allegation in the show cause notice was contested by the appellant. But, the adjudicating authority, by Order -in -Original No. 18/ADC/98, dated 4 -5 -1998, imposed a penalty of Rs. 8,03,696/ - on the appellant invoking the provisions contained in Rule 209A of the Central Excise Rules, 1944. By that order, adjudicating authority confirmed the demand of Rs. 8,03,696/ - as duty short levied and similar amount by way of penalty under Rule 9(2), 52(a)(8) and 173Q of the Rules on M/s. Ram Ply Board Industries. M/s. Ram Ply Board Industries got the adverse order settled under Kar Vivad Samadhan Scheme. Appellant herein challenged that part of the order under which penalty has been imposed by preferring appeal before the appellate authority namely, Commissioner (Appeals). That appeal happened to be disposed of by order -in -appeal No. 425 -CE/MRT/99, dated 6 -5 -1999 by reducing the penalty to Rs. 1,50,000/ -. For a proper understanding of the order, we read last two paragraphs : -

(2.) WHILE disposing of the appeal, the Commissioner posed three issues for consideration. The second issue was "whether the appellant was commission agent or not" and the third issue was "whether the appellants have actively and consciously dealt with the goods which they knew were undervalued and on which appropriate duty of excise as per their sale value was not paid".

(3.) DEALING with the second issue, the Commissioner came to the finding that the submission made by the appellants that they were not working as commission agent is convincing. This shows that the Commissioner categorically found that they were not the commission agents. In the face of such a finding, we are at a loss to understand as to how the Commissioner sustained the penalty under Rule 209A of the Central Excise Rules, 1944, specially when the Commissioner did not render any finding on the third issue raised for consideration. Without a finding on the third issue which was posed for decision, the Commissioner could not have sustained a penalty invoking the provision contained in Rule 209A. On this ground, the penalty imposed on the appellant has to be vacated. We do so.