Union of India vs Beryl Drugs Ltd.

Shri P. Prasad, learned counsel for the appellant. Heard.

By this appeal under Section 35G(2) of the Central Excise Act, 1944, the Revenue is partly aggrieved by the impugned order thereby, learned CESTAT (Customs, Excise and Service Tax Appellate Tribunal), New Delhi while dismissing the appeal, in Para 95 of the order dated 29-10-2010 [2011 (264) E.L.T. 73 (Tri. - Del.) ] has held that the matter involves interpretation of notification and, therefore, the question of penalty does not arise and set aside the order of imposition of penalty.

Learned counsel for the appellant during the course of arguments very fairly submitted that the question involved in this appeal is squarely covered by the decision of the Apex Court in the matter of Uniflex Cables Ltd. Vs. Commissioner, Central Excise, Surat-II, (2011) 271 ELT 161 : (2011) 13 JT 233 : (2011) 9 SCALE 370 : (2011) 10 SCR 591 : (2012) AIRSCW 2520 : (2011) 6 Supreme 191 . Paras 12 to 15 are relevant, which reads as under :--

"12. So far as the second issue with regard to the imposition of penalty in the present case is concerned, the Commissioner, himself, in his order-in-original has stated that the issue involved in the case is of interpretational nature. Keeping in mind the said factor, the Commissioner thought it fit not to impose harsh penalty and a penalty of an amount of Rs. 5 lakhs was imposed on the appellant while confirming the demand of the duty.

It is also evident from the said order that the Commissioner also found that except for the statement of the Excise Director and Excise Clerk of the assessee company there was no other evidence pointing out any accusing finger at them in dealing with offending goods knowingly. A clear finding has been recorded by the Commissioner that it was difficult to hold that the appellant knowingly dealt with excisable goods which were cleared without payment of duty. Nor the Department itself took it as a formal case of offence.

When we take into consideration the aforesaid facts and also the fact that the Commissioner himself found that it is only a case of interpretational nature, in our considered opinion, no penalty could be and is liable to be imposed on the appellant herein.

Therefore, in the facts and circumstances of the present case, we are of the view that penalty should not have been imposed upon the appellant. Consequently, we quash the order of the Commissioner imposing penalty as also the order of the Tribunal so far as it confirms imposition of penalty upon the appellant. The appeal is allowed to the aforesaid extent leaving the parties to bear their own costs."

In view of the law laid down by the Apex Court in the matter of Uniflex (supra), we are of the view that the learned CESTAT has rightly set aside the order of imposition of penalty. No case to interfere with the impugned order dated 29-10-2010, as prayed in this appeal is made out. The appeal has no merit and is accordingly, dismissed.