HITKARI FIBRES LTD. Vs. CCE

JUDGEMENT

(1.) THESE two appeals filed by the appellants were against the same Order -in -Appeal No. 32/AKG/GGN/2003.

(2.) THE central excise officers visited the premises of the appellants at A -10, Ansal Palam Udyog, Sector 18, Gurgaon (referred to as dealing unit) holding central excise licence for first stage dealer. On verification of the their stock and record, the officers found that stock of 2392 pieces of carpets received by the appellants were without payment of duty and these were also not recorded in their RG -23D account. Officers, therefore, visited the manufacturing unit of the appellants at plot No. 42 Phase -I Udyog Vihar Gurgaon and found that these goods were cleared without payment of duty and without issue of invoice. The manufacturing unit paid duty on these goods under PLA entry No. 238 dated 10.9.2000. Subsequently, show cause notice was issued to the manufacturing unit as well as dealing unit proposing to seize the goods and to impose penalty on the appellants. The deputy Commissioner adjudicated the case and confiscated the seized goods valued at Rs. 5,62,101 and confirmed the duty demand on the said goods. He gave option to the appellants to redeem the same on redemption fine of Rs. 1,40,000. He also imposed penalty of Rs. 1,00,000 on the dealing unit and Rs. 1,00,000 on the manufacturing unit. The Commissioner (Appeals) reduced the penalty to Rs. 50,000 each on the manufacturing unit and the dealing unit.

(3.) DURING hearing Shri K.K. Anand, the learned advocate pleads that the appellants are not contesting the duty liability but they are only contesting the imposition of penalty on the manufacturing unit on the ground that duty was paid before the issue of show cause notice and in view of the decision of the Karnataka High Court in the case of CCE, Mangalore v. Shree Krishna Pipe Industries, 2004 (93) ECC 477 : 2004 (61) RLT 17(Kar), the penalty is not imposable under Rule 173Q on the manufacturing unit. It was also pleaded that the redemption fine imposed is on the higher side.