The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed a penalty of Rs. 1 crore on a gold manufacturing company’s director named Pawan Kumar.
The bench of Binu Tamta (Judicial Member) and Hemambika R.Priya (Technical Member) has observed that the appellant/assessee had taken the registration with the central excise authorities on 29.07.2016, however, did not file the returns for the period 01.03.2016 to 30.06.2017 nor charged the excise duty from their customers during the period 01.03.2016 to December 2016.
The bench noted that the failure to file service tax returns is a violation but the said violation cannot be attributed with intent to evade payment of duty and therefore the penalty imposed under section 11AC Is not sustainable however, since no general penalty has been imposed by the Adjudicating Authority, there is no reason to impose any such penalty on the appellant.
The appellant/assessee is engaged in the manufacture of articles of jewellery falling under Chapter Heading 7113 of Central Excise Act, 1944 (CETA). Investigations revealed that the appellant had not paid central excise duty on the articles of jewellery manufactured and cleared by them during the period 1.03.2016 to 30.0 6.2017. They were not charging central excise duty from the customers till December 2016.
From 01.01.2017, the appellant collected the central excise duty from the customers on the invoices and paid the same under GAR-7 challans, however, they did not file any central excise returns during the period 1.03.2016 to 30.06.2017.
The evasion of central excise duty amounted to Rs.5,45,22,719. During investigation, the appellant deposited the amount of Rs.4,93,99,620 and requested for closure of the investigation by waiver of show cause notice.
The tribunal held that the appellant is liable to pay central excise duty on manufacture of articles of jewellery except demand towards the exports and the benefit of cum-duty tax, however, having held that the extended period of limitation cannot be invoked, the demand raised in the show cause notice is hereby set aside. Consequently, the order is unsustainable to that extent.
Case Details
Case Title: M/S. P.P. Jewellers Pvt. Ltd. Versus Principal Commissioner, Central Tax, And Cgst Commissionerate
Case No.: Excise Appeal No. 52154 Of 2022
Date: 28/03/2025
Counsel ForAppellant: Karan Khanna
Counsel For Respondent: Rakesh Agarwal
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