LexTHE COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH versus M/S STESALIT LIMITED
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[2017 j I S.C.R. 836 A THE COMMISSIONER OF CENTRAL EXCISE. CHANDIGARH B c D E F G H v. MIS STESALIT LIMITED (Civil Appeal No. 4507 of2004) FEBRUARY 15. 2017 [J. CHELAMESWAR AND ABBAY MANOIIAR SAPRE, JJ.] Ce11tral Excise Act, 194./ - s. llAC - Ce11tra/ Excise Rules, 194./ - r.173Q - No11-pay111e11t of duty - Demand of duty along with interest as also imposition of penalty uls. JI AC read with 1:173Q by the adjudicating authority - Challenge raised only to the quantum of penalty - Reduction of penalty by the tribunal - Sustainability of - Held: In view of Dharamendra Textile case, the tribunal erred in reducing the penalty without giving justifiable reasons for the reduction - Failure of the tribunal to take into consideration the Supreme Court judgment, rather reliance p/ac;ed on its earlier order - Thus, the order passed by the tribunal set aside. Allowing the appeal, the Court HELD: Applying the law laid down in *D/rnramendra Textile Processors case, to the facts of the case, the tribunal erred in reducing the amount of penalty from Rs.2,06,000/- to Rs.50,000/-. The tribunal, failed to take into consideration the law laid down in the case of Dlwramendra Textile Processors which the tribunal was bound to take while deciding the appeal and instead the tribunal wrongly placed reliance on its own decision in the case of **Escorts JCB Ltd. The tribunal gave no .instifiable legal reasons for reducing the penalty amount. The reasoning and the conclusion arrived at by the tribunal cannot be concurred with. They are not legally sustainable. The order passed by the tribunal is set aside and that of the adjudicating authority is restored. [Paras 15-17] [840-E-H] *Union of India & Ors. v. Dharame11dra Textile Processors & Ors. [2008] 14 SCR 13 : (2008) 13 SCC 369 - relied ou. **Escorts JCB Ltd. vs CCE 2000 (118) ELT 650 (Tribunal); Di lip N. Shro.ff v. Jui11t Commissioner of 836 THE COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH v. MIS STESALIT LIMITED Income Tax. Mumbai & Anr. [2007] 7 SCR 499 : (2007) 6 SCC 329; Chairman. SEBI v. Shriram Mutual Fund & Anr. (2006) 5 SCC 361 - referred to. Case Law Reference [2Q07] 7 SCR 499 referred to para 14 c2006J 5 sec 361 referred to para 14 [2Q08] 14 SCR 13 relied on para 15 (118) ELT 650 (Tribunal) referred to para 15 CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4507 of2004. From the Judgment and Order No. 123 of 2004-B dated 05.11.2003 of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi in Appeal No. E/1122 of2003-B. 837 A B c K. Radhakrishnan, Sr. Adv., Ms. Binu Tamta, H. R. Rao, D B. K. Prasad, Shreekant N. Terdal, Advs. for the Appellant. The Judgment of the Cou1t was delivered by ABHAY MANOHARSAPRE, J. I. This appeal is filed against the judgment and final order No. 123/2004-B dated 05.11.2003 passed in Appeal No. E/1122 of2003-B by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi whereby the Tribunal partly allowed the appeal and reduced the amount of penalty from Rs.2,06,000/- to Rs.50,000/-. 2. We herein set out the facts, in brief, to appreciate the issue involved in this appeal. 3. The respondent-a Limited Company is engaged in the manufacture of parts of Railways and Tramways stock classifiable under Chapter 86 including smoothing Reactors falling under Chapter 85 .04 of the Schedule t9 the Central Excise Tariff Act, 1985. The respondent also undertakes the activity of modification/up-gradation of old Smoothing Reactors received from the Railways. 4. During the course of modification, the weight of copper coil in the old smoothing reactors is increased by adding new copper coil to the existing old copper coil. E F G H 838 A B c D E F SUPREME COURT REPORTS [ 201 7] 1 S.C.R. 5. It was, however, observed by the authority concerned that the respondent manufactured copper coils from the copper strips and used them capatively in the up-gradation of smoothing reactors. The respondent, however, neither paid any duty on the copper coil used by them capativ.ely in their modification activity undertaken at the relevant period nor did they submit the requisite declaration under Rule 173-C of the Central Excise Rules, l 944(hereinafter referred to as "the Rules"). 6. Since no duty was paid by the respondent on upgraded reactors, they were not eligible for the benefit of exemption provided vide Notification No. 67/95-CE dated 16.03.1995. They we
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