In the Customs, Excise & Service Tax Appellate Tribunal, Bangalore
Shri T.K. Jayaraman, Member (Technical) Shri M.V. Ravindran, Member (Judicial)
Hindustan Petroleum Corpn. Ltd.
Versus
Commissioner of Central Excise, Visakhapatnam
Final Order No. 1373/2008 dt. 11.12.2008 certified on 23.12.2008 in Appeal No. E/10/2005
Per T.K. Jayaraman :
This appeal has been filed against Order-in-Original No. 12/2004 dated 30.9.2005 passed by the Commissioner of Central Excise and Customs, Visakhapatnam-I Commissionerate.
2. We heard both sides.
3. The appellants are manufacturers of petroleum products. In the month of May 2003, they cleared furnace oil in bond to HPCL Vasco Terminal. The goods were cleared under AR-3. In the normal course, they would be receiving the re-warehousing certificate which will ensure that the goods have reached the destination and no contravention took place. This is actually bond to bond clause. But in the present case, it so happened that the Vasco Terminal before receiving the petroleum products, due to some shortage or ullage problem sold the goods to M/s. Tata Power Company without receiving them. This is no doubt a contravention of the Central Excise Law. But, the learned consultant informs the Bench that the moment the appellant came to know about this on 5.11.2003, they immediately paid the duty and interest was paid subsequently. However, revenue proceeded against the appellants on the ground of violation of the Central Excise Law. Apart from confirming the duty and interest, the Commissioner in the impugned order imposed a penalty of Rs. 25,00,000/- under Rule 25 of the Central Excise Rules, 2002.
4. It was argued by the learned consultant that the appellant is a huge public sector undertaking paying enormous amount of revenue to the exchequer. The incident which happened though unfortunate is sporadic case. He invited our attention to the provisions of Rule 25 of the Central Excise Rules and stated that the said provisions may not strictly be applicable to the present case, as there was actually no intention to evade payment of duty.
5. On the other hand, the learned departmental representative invited our attention to the findings of the Commissioner in the impugned order. He particularly invited our attention to the long gap between the date of removal of the goods and the date of payment of duty and also the interest. He stated that the assessee is well versed with the Central Excise procedures and they ought to have been more careful with complying with the provisions of Central Excise laws, hence, he desired that some penalty should be levied on the appellants.
6. On a careful consideration of the matter, we find that it has not been established that the appellants violated deliberately the Central Excise provisions with an intention to evade Central Excise duty. Moreover, when we go through Rule 25, it is seen that the contravention of any provisions of the Rules or Notifications should be with an intent to evade duty, so as to attract penalty under the said Rule 25. In the circumstance of the case, we are satisfied that no penalty is called for in terms of Rule 25. Moreover, the appellant is a public sector undertaking contributing huge money to the exchequer. These factors are to be taken into consideration while imposing penalty. In view of the above observations, we set aside the penalty and allow the appeal.
Pronounced and dictated in open Court.
