w w w . L a w y e r S e r v i c e s . i n



M/s. Rane NSK Steering Systems (P) Ltd., Rep.by V. Sethuraman v/s The Assistant Commissioner of Central Excise (Now the Assistant Commissioner of CT & CE), Rajakilapakkam & Another


Company & Directors' Information:- C P SYSTEMS PVT LTD [Active] CIN = U29199DL1999PTC101718

Company & Directors' Information:- RANE NSK STEERING SYSTEMS PRIVATE LIMITED [Active] CIN = U29141TN1995PTC030621

Company & Directors' Information:- T SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U72200DL2004PTC127138

Company & Directors' Information:- A K M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC018546

Company & Directors' Information:- W B M SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1984PTC017764

Company & Directors' Information:- A R G SYSTEMS LIMITED [Active] CIN = U74899DL1994PLC062621

Company & Directors' Information:- RANE PVT LTD [Active] CIN = U51220MH1920PTC000753

Company & Directors' Information:- S SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111270

Company & Directors' Information:- SYSTEMS INDIA PRIVATE LIMITED [Active] CIN = U74899DL1994PTC059377

Company & Directors' Information:- V S S SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U03000TZ1997PTC007933

Company & Directors' Information:- CE-N (INDIA) PRIVATE LIMITED [Strike Off] CIN = U72900PN2012PTC145470

Company & Directors' Information:- I L SYSTEMS INDIA PRIVATE LIMITED [Strike Off] CIN = U18100GJ1999PTC037104

Company & Directors' Information:- A V SYSTEMS PRIVATE LIMITED [Active] CIN = U31909PN2001PTC015788

Company & Directors' Information:- N D T SYSTEMS PRIVATE LIMITED [Active] CIN = U74210MH1996PTC104744

Company & Directors' Information:- S P P S SYSTEMS PRIVATE LIMITED [Active] CIN = U72200TG2000PTC033732

Company & Directors' Information:- L S I SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U32109DL2000PTC105666

Company & Directors' Information:- H B S SYSTEMS PRIVATE LIMITED [Active] CIN = U74899DL1992PTC048198

Company & Directors' Information:- U C SYSTEMS INDIA PVT LTD [Active] CIN = U72200DL1997PTC084267

Company & Directors' Information:- L C SYSTEMS PRIVATE LIMITED [Active] CIN = U55200PB2012PTC036880

Company & Directors' Information:- C I SYSTEMS PVT LTD [Active] CIN = U45200TG1983PTC003915

Company & Directors' Information:- M J SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72900MH2005PTC150591

Company & Directors' Information:- R R SYSTEMS PRIVATE LIMITED [Active] CIN = U30007DL1999PTC098142

Company & Directors' Information:- C N C SYSTEMS PVT LTD [Active] CIN = U72900DL1999PTC100476

Company & Directors' Information:- CE INDIA LIMITED [Active] CIN = U31908MH2007PLC171109

Company & Directors' Information:- M B M SYSTEMS PRIVATE LIMITED [Active] CIN = U30006DL1988PTC030404

Company & Directors' Information:- C SYSTEMS PRIVATE LIMITED [Active] CIN = U31103TN2009PTC071155

Company & Directors' Information:- R M I SYSTEMS PRIVATE LIMITED [Active] CIN = U72200KA2011PTC060246

Company & Directors' Information:- W & S SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U74910TN2005PTC055568

Company & Directors' Information:- M. Y. T. SYSTEMS PRIVATE LIMITED [Under Process of Striking Off] CIN = U74990TG2016PTC110104

Company & Directors' Information:- L V SYSTEMS PRIVATE LIMITED [Active] CIN = U31900KA2021PTC150256

Company & Directors' Information:- S E I SYSTEMS LIMITED [Strike Off] CIN = L74899DL1994PLC061731

Company & Directors' Information:- D C S SYSTEMS LIMITED [Strike Off] CIN = U72100MP2000PLC014224

Company & Directors' Information:- I T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL1999PTC098431

Company & Directors' Information:- I O SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029166

Company & Directors' Information:- S E C O M SYSTEMS PRIVATE LIMITED [Active] CIN = U31909HR2009PTC039084

Company & Directors' Information:- D M SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL1999PTC101817

Company & Directors' Information:- K K K SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100UP1995PTC017784

Company & Directors' Information:- E-SYSTEMS (INDIA) PRIVATE LIMITED [Active] CIN = U72200WB2003PTC096700

Company & Directors' Information:- J B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200KL1997PTC011510

Company & Directors' Information:- M AND S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200MH1996PTC103819

Company & Directors' Information:- K AND M SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U32101UP1993PTC015352

Company & Directors' Information:- S S V SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1996PTC037072

Company & Directors' Information:- R G B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72300TN1998PTC040485

Company & Directors' Information:- C C SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31100TG1996PTC023469

Company & Directors' Information:- K R T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U52392TN2002PTC048704

Company & Directors' Information:- B & D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72100OR1996PTC004611

Company & Directors' Information:- A M P S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900WB2001PTC093281

Company & Directors' Information:- G M E SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U71290DL1987PTC029758

Company & Directors' Information:- R B SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31300RJ1990PTC005689

Company & Directors' Information:- E D H SYSTEMS PVT. LTD. [Strike Off] CIN = U99999DL1991PTC045384

Company & Directors' Information:- H N G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900RJ2012PTC040713

Company & Directors' Information:- F A SYSTEMS PRIVATE LIMITED [Active] CIN = U72100MH2004PTC148941

Company & Directors' Information:- H AND P SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U74900PN2013PTC146918

Company & Directors' Information:- G. K. SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900PN2006PTC129225

Company & Directors' Information:- T G SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U31403TN2006PTC061859

Company & Directors' Information:- I T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72400AS1999PTC005824

Company & Directors' Information:- Y Y SYSTEMS PRIVATE LIMITED [Active] CIN = U72200CH2015PTC035767

Company & Directors' Information:- N P M E SYSTEMS PRIVATE LIMITED [Active] CIN = U29299DL1998PTC094645

Company & Directors' Information:- NSK INDIA PRIVATE LIMITED [Active] CIN = U72900DL2016PTC300626

Company & Directors' Information:- R D SYSTEMS PRIVATE LIMITED [Active] CIN = U72100DL2000PTC103462

Company & Directors' Information:- V C SYSTEMS PVT LTD [Active] CIN = U72200DL2001PTC111812

Company & Directors' Information:- K B N SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U64204DL1997PTC088904

Company & Directors' Information:- A B SYSTEMS PRIVATE LIMITED [Active] CIN = U93000DL2012PTC234774

Company & Directors' Information:- J S N D SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900GJ2011PTC065160

Company & Directors' Information:- J C D SYSTEMS PVT LTD [Strike Off] CIN = U32109PB1988PTC008438

Company & Directors' Information:- Y R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC105093

Company & Directors' Information:- S R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72900DL2000PTC104743

Company & Directors' Information:- F C S SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U73100DL1997PTC090517

Company & Directors' Information:- E R SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC061904

Company & Directors' Information:- R & T SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U72200DL2008PTC179617

Company & Directors' Information:- Q S Q SYSTEMS PRIVATE LIMITED [Strike Off] CIN = U51109KA2000PTC026269

    Writ Appeal Nos. 92, 97 to 99, 101 to 103, 105, 111 & 113 of 2019 & CMP. Nos. 816, 883, 885, 899, 905, 906, 929, 948, 1034 & 1035 of 2019

    Decided On, 22 January 2019

    At, High Court of Judicature at Madras

    By, THE HONOURABLE MR. JUSTICE T.S. SIVAGNANAM & THE HONOURABLE MR. JUSTICE N. SATHISH KUMAR

    For the Appellant: G. Natarajan, Advocate. For the Respondents: R1, T. Pramod Kumar Chopda, SSC, R2, S.R. Sundar, SSC.



Judgment Text

(Prayer: Appeals under Clause 15 of the Letters Patent against the common order dated 26.10.2018 made in WP.Nos.27524, 27544, 27555, 27575, 27581, 27584, 27604, 27610, 27615 and 27620 of 2018.)

Common Judgment

T.S. Sivagnanam, J.

1. These appeals are filed by the assessee questioning the common order passed by in W.P.No.27524 of 2018 etc. cases dated 26.10.2018.

2. In this judgment, the parties are referred to as the assessee and the Revenue.

3. The assessee filed the said batch of writ petitions challenging the common Order-in-Original dated 29.2.2016 whereby the demand raised on the assessee for service tax was confirmed under Rule 14 of the CENVAT Credit Rules, 2004 (hereinafter called the Rules) read with Section 11A of the Central Excise Act, 1944 (hereinafter called the Act). In the said common Order-in-Original, there was a demand for interest as applicable under Rule 14 of the Rules read with Section 11AB/11AA of the Act and equal penalty was also imposed as that of the central excise duty under Rule 15 of the Rules.

4. As against the said common Order-in-Original dated 29.2.2016, the assessee preferred appeals before the Commissioner of Central Excise (Appeals-II), Chennai [for short, the CCE(A)]. Admittedly, the appeals were filed beyond the period of limitation and there was a delay of 121 days in filing the appeals. The law relating to the power of the CCE(A) to condone the delay having been settled in various decisions, the CCE(A), vide common order dated 21.9.2016, held that he has no power to condone the delay in filing the appeals.

5. The assessee carried the matter on appeal to the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for short, the Tribunal), canvassing the merits of the matter as to how the demand made in the show cause notices containing various dates starting from 31.1.2008, as affirmed in the said common Order-in-Original dated 29.2.2016, is not sustainable. Further, the assessee also referred to the affidavit filed by their counsel before the CCE(A) explaining the delay. However, the Tribunal, vide common order dated 29.6.2017, dismissed the appeals as there is no provision either under Section 35 of the Act or anywhere in the Act to allow the assessee to seek any further time to present an appeal before the CCE(A) or for that matter to the latter to allow any further condonation beyond the period of 90 days.

6. As against the said common order dated 29.6.2017, the assessee filed appeals before the Division Bench of this Court in CMA.Nos.1691 to 1700 of 2018, in which, the assessee raised five substantial questions of law for consideration, one of them being that the Tribunal ought to have appreciated the difference between the provisions of Sections 35(1) and Section 35B(3) of the Act and come to the conclusion that the CCE(A) does not have powers to condone the delay beyond 30 days, as the same is contrary to the provisions of Section 35 of the Act. The assessee further contended that the Tribunal was not correct in coming to the conclusion that there is no power for the CCE(A) to condone the delay, when Section 35(1) of the Act does not prescribe a mandatory time limit for filing the appeals.

7. The Division Bench of this Court, by a common judgment dated 07.8.2018, dismissed the appeals filed by the assessee by relying upon the decision of the Hon'ble Supreme Court in the case of Singh Enterprises Vs. CCE, Jamshedpur [reported in (2008) 221 ELT 163]. The Division Bench also referred to another judgment of this Court in the case of R.Gowrishankar Vs. CST-I (Appeals), Chennai [W.A.No.589 of 2016 dated 13.6.2016]. The Division Bench of this Court, in paragraph 17 of the said common judgment dated 07.8.2018, observed that though the reasons assigned (for belated filing of the appeals) may appear to be sufficient, the Statute does not provide condonation beyond the period provided therefor and that if the prayer made by the assessee is accepted, it would amount to adding words to the Enactment.

8. Having failed before the Division Bench on the ground of belated filing of appeals and also on the ground that there is no power for the Court to condone the delay, the assessee filed writ petitions challenging the common Order-in-Original dated 29.2.2016.

9. The main contention raised by the assessee before the learned Single Judge was that Rule 15 of the Rules deals with situations warranting penalty for irregular availment of CENVAT credit availed in respect of inputs, capital goods and input services by both the manufacturer and the service provider, that invocation of proper Sub-Rule of the said Rule is mandatory in order to impose penalty on a manufacturer or a service provider, that the assessee being a manufacturer, the only applicable Sub-Rule upto 31.3.2010 is Sub-Rule (3) of Rule 15 of the Rules, under which, penalty cannot exceed Rs.2,000/- and that there is no separate provision for cases involving fraud, suppression, etc.

10. It was further contended by the assessee before the learned Single Judge that for the period upto 31.3.2010, there is no provision to impose equal amount of penalty on a manufacturer for wrongly availing any credit on input services irrespective of the issue as to whether any fraud or suppression is involved or not. Challenging imposition of equal amount of penalty under Rule 15 of the Rules, the assessee contended that the first respondent clearly exceeded in jurisdiction vested upon him under Rule 15(3) of the Rules as it stood then by imposing equal penalty for the period from 01.3.2008 to 31.3.2010, during which period, he cannot at all impose equal penalty on a manufacturer, who has wrongly availed any credit on input services and that the penalty that could be imposed under Rule 15(3) of the Rules could be only Rs.2,000/-.

11. With regard to equal amount of penalty imposed for the period from 01.4.2010 to 31.1.2015, before the learned Single Judge, the assessee stated that in none of the show cause notices, the first respondent alleged fraud, willful misstatement, collusion or suppression of facts, that the show cause notices are periodical in nature and that there is no case for imposition of equal amount of penalty, since Rule 15(2) of the Rules specifically states that such penalty can be imposed only in cases where fraud, willful misstatement, collusion or suppression of facts with an intention to evade payment of duty is made out.

12. Before the learned Single Judge, the assessee referred to various decisions on the point with regard to availment of GTA credit and stated that there was a dispute on the legal issue and that there were several judgments and that ultimately, the matter stood settled by the decision of the Hon'ble Supreme Court in the case of CCE Vs. Ultratech Cement Limited [reported in 2018-TIOL-42-SC-CX]. Therefore, it was submitted that the question of suppression can never be invoked, as the issue was continuously being litigated for several years.

13. Before the learned Single Judge, with regard to maintainability of the writ petitions challenging the said common Order-in-Original dated 29.2.2016, in spite of the assessee having lost upto this Court on the ground of limitation in challenging the orders, reliance was placed on the decision of the Hon'ble Full Bench of the Andhra Pradesh High Court in the case of Electronic Corporation of India Limited Vs. Union of India [reported in (2018) 361 ELT 22] and the decision of the Hon'ble Full Bench of the High Court of Gujarat in the case of Panoli Intermediate (India) Private Limited [reported in (2015) 326 ELT 532].

14. The learned Single Judge, who heard the writ petitions, at the admission stage, was not inclined to entertain the same on the ground that in both the decisions relied upon by the assessee namely Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited, the appeals filed by the assessees therein were only upto the Tribunal and they were dismissed as time barred. However, in the case of the assessee herein, the appeals filed before the Division Bench of this Court were dismissed confirming the orders of the First and Second Appellate Authorities and this is a distinguishing feature in the case of the assessee herein. After noting the decisions in the case of Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited, the learned Single Judge observed that even going by the said decisions, the assessee has to satisfy that their case would fall under any of the following categories namely the Adjudicating Authority lacks jurisdiction or acted in excess of jurisdiction or in violation of principles of natural justice. Further, the learned Single Judge noted that the assessee had challenged the common order of the Adjudicating Authority on merits and not on any of the grounds indicated by the decisions in the case of Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited.

15. With regard to the power to impose equal penalty for the period from March 2008 to March 2010, the learned Single Judge was of the view that it is a wrong quoting of the provision by the Adjudicating Authority and that as long as he is competent to impose penalty, the decisions in the case of Electronic Corporation of India Limited and in the case of Panoli Intermediate (India) Private Limited could not be made applicable to the case of the assessee herein. Further the learned Single Judge observed that the Division Bench of this Court already dismissed the appeals arising out of the orders passed by the Adjudicating Authority though on the ground of limitation and that therefore, the assessee was not entitled to file writ petitions as a matter of right, as the jurisdiction vested on this Court under Article 226 of The Constitution of India is, undoubtedly a discretionary one, not necessarily to be exercised even assuming that the assessee has made out a case. The learned Single Judge further observed that it is not as if the assessee is without any remedy and that it is always open to the assessee to challenge the order passed by the Division Bench before the Hon'ble Supreme Court. For such reasons, the writ petitions were dismissed as not maintainable vide common order dated 26.10.2018. The said common order is impugned in these appeals.

16. We have heard Mr.G.Natarajan, learned counsel for the assessee and Mr.T.Pramod Kumar Chopda, learned Senior Standing Counsel accepting notice for the first respondent and Mr.S.R.Sundar, learned Senior Standing Counsel accepting notice for the second respondent.

17. The first issue to be considered is as to whether the assessee was entitled to file writ petitions challenging the said common Order-in-Original dated 29.2.2016 after having lost before this Court in CMA.Nos.1691 to 1700 of 2018 dated 07.8.2018, by which, the appeals filed by the assessee were dismissed confirming the orders passed by the Tribunal, which upheld the decision of the CCE(Appeals) rejecting the appeals filed by the assessee as barred by limitation.

18. We need not labour much to take a decision on this question, as an identical issue was considered by the Hon'ble Full Bench of the Andhra Pradesh High Court in the case of Electronic Corporation of India Limited wherein a reference was made by a Division Bench to the Full Bench raising a question as to whether the decisions of the Division Bench in the case of M/s.Resolute Electronics Private Limited Vs. Union of India [reported in (2015) 319 ELT 51 (AP)] and in the case of Star Enterprises Vs. Joint Commissioner, Guntur [reported in (2016) 41 STR 20 (AP)] require reconsideration. By these decisions, the Division Bench of the Andhra Pradesh High Court held that a writ petition under Article 226 of The Constitution of India would not lie against an Order-in-Original passed under the Act once the statutory remedy of appeal against the said order stood foreclosed by the law of limitation.

19. The facts in the case on hand are identical to the facts of the cases, which were the subject matter of reference before the Hon'ble Full Bench of the Andhra Pradesh High Court. Ultimately, the Hon'ble Full Bench of the Andhra Pradesh High Court in the decision in the case of Electronic Corporation of India Limited, after taking into consideration the decision of the Hon'ble Full Bench decision of the Gujarat High Court in the case of Panoli Intermediate (India) Private Limited, answered the three questions framed for consideration in the following manner:

'The Full Bench finally answered the reference as under:

(1) Question No.1 is answered in negative by observing that the limitation provided under Section 35 of the Act cannot be condoned in filing the appeal beyond the period of 30 days as provided by the proviso nor the appeal can be filed beyond the period of 90 days.

(2) The second question is answered in negative to the extent that the petition under Article 226 of the Constitution would not lie for the purpose of condonation of delay in filing the appeal.

(3) On the third question, the answer is in affirmative, but with the clarification that

(A) the petition under Article 226 of the Constitution can be preferred for challenging the order passed by the original adjudicating authority in following circumstances that

(A.1) The authority has passed the order without jurisdiction and by assuming jurisdiction which there exist none, or

(A.2) Has exercised the power in excess of the jurisdiction and by overstepping or crossing the limits of jurisdiction, or

(A.3) Has acted in flagrant disregard to law or Rules or procedure or acted in violation of principles of natural justice where no procedure is specified.

(B) Resultantly, there is failure of justice or it has resulted into gross injustice.'

20. In the decision in the case of Electronic Corporation of India Limited, the first question was answered against the assessee thereby holding that the period of limitation provided under Section 35 of the Act can be extended only upto 30 days as provided by the Proviso and it cannot be extended beyond 90 days. The second question was also answered against the assessee holding that a writ petition is not maintainable for the purpose of condonation of delay in filing the appeal.

21. The third question, which assumes importance for the case on hand, is when the statutory remedy or appeal under Section 35 of the Act is barred by law of limitation, whether, in a writ petition under Article 226 of The Constitution of India, the order passed by the Original Adjudicating Authority could be challenged on merits. This question was answered in the affirmative, but with a clarification. The Hon'ble Full Bench of the Andhra Pradesh High Court issued three pointers while answering the said question in the affirmative. In other words, the Hon'ble Full Bench held that a writ petition under Article 226 can be preferred for challenging the order of the Adjudicating Authority under three circumstances, the first of which being that the Authority, who passed the order, did so without jurisdiction or assumed jurisdiction. Secondly, he exercised powers in excess of jurisdiction and by overstepping or crossing the limits of jurisdiction. Thirdly, he acted in flagrant disregard to the Rules or the procedure or acted in violation of the principles of natural justice where no procedure is prescribed. Resultantly, there is a failure of justice or it has resulted into gross injustice.

22. Thus, we are required to see as to whether the assessee has brought their case within anyone or more of the circumstances as pointed by the Hon'ble Full Bench of the Andhra Pradesh High Court in the case of Electronic Corporation of India Limited. Identical view was taken by the Hon'ble Full Bench of the Gujarat High Court in the case of Panoli Intermediate (India) Private Limited.

23. Admittedly, the assessee, while responding to the show cause notices, which we find as periodical notices, did not specifically canvass the issue, which they raised in the writ petitions namely challenging the jurisdiction of the Authority to impose equal penalty for the period from March 2008 to March 2010. Secondly, the assessee did not raise the contention, which was raised in the writ petitions stating that equal penalty could not have been imposed for the period from 01.4.2010 to 31.1.2015 since there is no allegation in the show cause notices that there is any willful misstatement, fraud, collusion, etc with an intention to evade payment of duty. We find that while replying to the show cause notices, the assessee canvassed the merits of the matter stating that the demand itself is not maintainable. Consequently, they stated that imposition of penalty does not arise.

24. In our considered view, the issue, which has been raised by the assessee before us and in the writ petitions, touches upon the jurisdiction of the Adjudicating Authority to impose equal penalty for the period upto 31.3.2010 and whether circumstances warrant imposition of equal penalty post 31.3.2010. We are not in agreement with the observation made by the learned Single Judge that a wrong provision was quoted by the Authority. We have perused the show cause notices and we find that in the show cause notices, there is a reference to Section 11AC of the Act and Rule 15 of the Rules. The Adjudicating Authority, while issuing the show cause notices, did not indicate as to under which Sub-Rule, he proposes to impose penalty, but merely mentioned Rule 15 of the Rules.

25. The respective learned Senior Standing Counsel are in a way right in pointing out that there is a reference to Section 11AC of the Act. However, the question of jurisdiction of the Authority to impose equal penalty requires to be considered, as Rule 15 of the Rules, as it then stood, provided imposition of penalty only upto an amount not exceeding Rs.2,000/-.

26. In this regard, it is relevant to quote Rule 15(3) of the Rules, which was applicable for the period from 01.3.2008 to 31.3.2010. It reads as hereunder:

'Rule 15. Confiscation and penalty.- (1) If any person takes CENVAT credit in respect of input or capital goods, wrongly or in contravention of any of the provisions of these rules in respect of any input or capital goods, then, all such goods shall be liable to confiscation and such person shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention has been committed, or two thousand rupees, whichever is greater.

(2) In a case, where the CENVAT credit in respect of input or capital goods has been taken or utilized wrongly on account of fraud, willful misstatement, collusion or suppression of facts, or contravention of any of the provisions of the Excise Act or the Rules made thereunder with intention to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of Section 11AC of the Excise Act.

(3) If any person takes CENVAT credit in respect of input services wrongly or in contravention of any of the provisions of these Rules in respect of any input service, then, such person shall be liable to a penalty which may extend to an amount not exceeding two thousand rupees.

(4) In a case, where the CENVAT credit in respect of input services has been taken or utilized wrongly by reason of fraud, collusion, willful misstatement, suppression of facts, or contravention of any of the provisions of the Finance Act or of the Rules made thereunder with intention to evade payment of service tax, then, the provider of output service shall also be liable to pay penalty in terms of the provisions of Section 78 of the Finance Act.

(5) Any order under Sub-Rule (1), Sub-Rule (2), Sub-Rule (3) or Sub-Rule (4) shall be issued by the Central Excise Officer following the principles of natural justice.

Rule 15A. General penalty - Whoever contravenes the provisions of these Rules, for which, no penalty has been provided in the Rules, he shall be liable to a penalty which may extend to five thousand rupees.'

27. For the period from 01.4.2010, Sub-Rule (3) of Rule 15 of the Rules is amended, which reads as follows:

'15. Confiscation and penalty.- (1) If any person takes or utilizes CENVAT credit in respect of input or capital goods or input services, wrongly or in contravention of any of the provisions of these Rules, then, all such goods shall be liable to confiscation and such person shall be liable to a penalty not exceeding the duty or service tax on such goods or services, as the case may be, or two thousand rupees, whichever is greater.

(2) In a case, where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of the Excise Act, or of the rules made thereunder with intent to evade payment of duty, then, the manufacturer shall also be liable to pay penalty in terms of the provisions of Section 11 AC of the Excise Act.

(3) In a case where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of these Rules or of the Finance Act or of the Rules made thereunder with intent to evade payment of service tax, then, the provider of output service shall also be liable to pay penalty in terms of the provisions of Section 78 of the Finance Act.

(4) Any order under Sub-Rule (1), Sub-Rule (2) or Sub-Rule (3) shall be issued by the Central Excise Officer following the principles of natural justice.

Rule 15A. General penalty - Whoever contravenes the provisions of these Rules, for which, no penalty has been provided in the Rules, he shall be liable to a penalty which may extend to five thousand rupees.'

28. Rule 15(3) of the Rules, which was in vogue till 31.3.2010, states that if any person takes CENVAT credit in respect of input services wrongly or in contravention of any of the provisions of the Rules in respect of any input service, then, such person shall be liable to a penalty which may extend to an amount not exceeding Rs.2,000/-. After amendment with effect from 01.4.2010, the said Rule contemplates levy of equal penalty where the CENVAT credit in respect of input or capital goods or input services has been taken or utilized wrongly by reason of fraud, collusion, willful misstatement or suppression of facts, etc., with intent to evade payment of service tax.

29. Thus, for the period from 01.4.2010, mens rea requires to be established to impose equal penalty. In our considered view, the issues as to whether equal penalty was imposable or in other words, whether the Adjudicating Authority had jurisdiction to impose equal penalty for the period prior to 31.3.2010 and as to whether facts warranted imposition of equal penalty for the period from 01.4.2010 are definitely issues touching upon the jurisdiction of the Authority to take a decision in the matter. Therefore, we are fully convinced that the assessee has made out a case for interference of the said common Order-in-Original in exercise of t

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he powers under Article 226 of The Constitution of India, as we are prima facie satisfied that the Adjudicating Authority assumed jurisdiction, which has been shown to be not in existence for the period upto 31.3.2010. 30. The second aspect is for the period from 01.4.2010 and the issue would be as to whether the Adjudicating Authority exceeded in his jurisdiction or crossed the limits of jurisdiction or acted in violation of the principles of natural justice in not examining as to whether the conduct of the assessee attracted the provisions of Rule 15(3) of the Rules and as to whether there was any mens rea on the part of the assessee. Thus, the issues raised by the assessee being issues touching upon the jurisdiction of the Authority, we are of the considered view that the writ petitions can be entertained. 31. However, we are conscious of the fact that these issues were not specifically canvassed by the assessee at the time they submitted their reply to the show cause notices from the year 2009. Nevertheless, these being issues relating to jurisdiction, we are of the view that the assessee should not be foreclosed from raising such issues, so that the first respondent can adjudicate upon such issues. For such a reason, we are inclined to remand the matters to the Adjudicating Authority for a fresh decision only in respect of imposition of penalty. 32. For the above reasons, the writ appeals are allowed. Consequently, the writ petitions are allowed and the common Order-in-Original dated 29.2.2016 is set aside so far as imposition of equal penalty for the periods both from March 2008 to March 2010 and from 01.4.2010 to 31.1.2015. The matters are remanded to the first respondent/Adjudicating Authority to take a fresh decision. The assessee is granted 15 days' time from the date of receipt of a copy of this judgment to file their objections to the show cause notices raising the contentions with regard to jurisdiction of the Adjudicating Authority to impose equal penalty. On receipt of the reply, the Adjudicating Authority shall afford an opportunity of personal hearing to the authorized representative of the assessee and take a fresh decision on merits and in accordance with law with regard to imposition of penalty. We make it clear that since we have remanded the matters to the Adjudicating Authority to take a fresh decision with regard to imposition of penalty for both the periods, the Adjudicating Authority shall take a decision after hearing the assessee uninfluenced by any of the observations contained in this judgment. No costs. Consequently, the connected CMPs are closed.
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