Stre/864/2008 Of Moser Baer India Ltd v. Commissioner Income Tax

Case :- SALES/TRADE TAX REVISION No. - 864 of 2008 Applicant :- Moser Baer India Ltd.Opposite Party :- Commissioner Income TaxCounsel for Applicant :- Krishna AgarwalCounsel for Opposite Party :- C.S.C. Hon'ble Saumitra Dayal Singh,J. 1. Heard Sri Krishna Agarwal, learned counsel for theapplicant-assessee and Sri B.K. Pandey, learned counselfor the respondent-revenue. 2. Present revision has been filed by the assessee against the order passed by the Trade Tax Tribunal Noidadated 19.3.2008 by which Appeal No.36 of 2006 filed bythe applicant-assessee for A.Y. 2004-05, has been partlyallowed and the amount of the original award passedunder Section 15-A-(1) (O) of U.P. Trade Tax Act, 1948(hereinafter referred to as the Act), of Rs.10,80,000/-, hasbeen reduced to its half i.e. Rs.5,40,000/-. 3. The present revision has been pressed on the followingquestion of law:- "(ii) Whether, in the absence of any intention to evadepayment of tax, a mere technical defect in Form-31warrants imposition of penalty U/s 15 (A) (o) of the Act?" 4. Undisputedly, the assessee is a 100 % export orientedunit (EOU) that also had been granted exemption underSection 4 (A) of the U.P. Trade Tax Act as a new unitengaged in the manufacture of compact disc and digitalvideo disc. In the aforesaid manufacturing activity, theassessee required for use of certain dyes. It importedsuch commodity from M/s Shiva Speciality ChemicalsIndia Ltd., Gandhidham, Gujrat. Also, it appears that theaforesaid commodity, namely dyes, was exempted fromthe payment of duty under the Central Excise Act. Acertificate for procurement and movement of those goodshad also been issued by the central excise authorities tothe assessee. Thus, vide certificate dated 10.3.2005 for10 kgs of dye Irgephor ultra green chemical, had beenissued. 5. Thus, it is the case of the assessee that it wascompletely exempted on the manufacture and sale of the compact disc and digital video disc and that its rawmaterial which is the main dispute in the present revision,was also exempted from the payment of excise duty theassessee being the 100% export oriented unit. Thestatutory records maintained under the Excise andCustoms Act did not show removal of those goods in thedomestic tariff area and they exclude the possibility ofundisclosed sales of the manufactured goods. Inasmuchas, the assessee is a reputed manufacturer of compactdisc and digital video disc, it also could not be assumed inabsence of any evidence that it may havesold the rawmaterial purchased by it. In any case, there is noallegation to that effect, made by the tax authority. 6. In such factual background, it has been submitted thatthe consignor, namely, M/s Shiva Speciality ChemicalsIndia Ltd., had been issued a Form-31 by the assesseebearing No.382954558 to supply the quantities of dyeIrgephor ultra green chemical. 10 kgs of that commoditywere dispatched by the consignor against its regularInvoice No. KA- 10400310 valued at Rs.27 lacs. Thosegoods were dispatched by the consignor from Delhi toNoida to the address of the assessee on a scooter/twowheeler bearing registration No. DL-35 U/532. Thosegoods were also accompanied by the originalconsignment note, bill of entry and excise certificate . 7. During a road check, the aforesaid goods were detained by the trade tax authority in view of the fact thatthe description of the goods, the date and the invoicenumber were not found recorded on Form-31accompanied with the goods. Consequently, the goodswere also seized. 7. During a road check, the aforesaid goods were detained by the trade tax authority in view of the fact thatthe description of the goods, the date and the invoicenumber were not found recorded on Form-31accompanied with the goods. Consequently, the goodswere also seized. 8. Since, it was the consignor and not the authorizedassessee who was at fault, the goods were released infavour of consignee after depositing the security amount.However, the Assessing Officer, proceeded to imposepenalty on the present assessee/consignee though it wasnot at fault and there was no intention to evade tax on itspart. While the Assessing Officer imposed a penalty ofRs.10,80,000/- by means of award order dated 27.7.2005,he did not adjudicate upon the objection raised by theassessee that there was no intention to evade tax on itspart. 9. A perusal of the penalty order reveals that the samehad been passed on the reasoning that the assessee hadfailed to fill up two important columns on From-31 being description of goods, bill issued and its date. Also, it hasbeen mentioned that the goods were not foundaccompanied with the original invoice. Upon appeal, thefirst appeal authority dismissed the appeal and sustainedthe penalty. Before the Tribunal, the assessee againraised the issue that in the facts of the present casewhere assessee had issued Form-31 to the consignor, itwas the consignor who was transporting goods outsidethe State of U.P. There was no default on the part of theassessee as may have invited the penalty upon it. In anycase, there was no intention to evade tax and there is nofinding to that effect. As to the presence of thedocuments, it was again submitted that the originalinvoice and consignment note were accompanying thegoods. The Tribunal upheld the imposition of penalty butreduced the penalty to half. 10. Learned counsel for the assessee would submit that,in the facts of the present case, it was undisputed that thegoods were brought inside the State of U.P. by theconsignor to whom the assessee had already issued theaforesaid import declaration form. In any case, in view ofthe fact that the assessee is a 100% export oriented unitand also exempt from tax under the Act by virtue ofeligibility certificate granted under Section 4 A of the Actand the further fact that neither there is any allegation ofthe assessee having ever sold the goods outside theState of U.P. nor it was its intention to evade tax, thepenalty imposed, is wholly illegal and contrary to law.Even otherwise, it has been submitted that, in the courseof regular assessment, the assessing authority did notmake any addition. Thus, there could never exist anyground to impose penalty with respect to the same. As asecond limb of his submission, it has been submitted thatthe penalty under Section 15-A-(1) (O) of the Act hingeson the intention to evade tax. In that regard, reliance hasbeen placed on the Division Bench of this Court in theCase of M/S Rama Pulses Vs. State of U.P. & othersreported in 2009 NTN (Vol. 41) 189. 11. Learned Standing Counsel on the other hand submitsthat the duty and responsibility, to make completedisclosure of the goods being imported, was on theassessee, as he was the person who brought the goodsinside the State. The fact that the description of thegoods, invoice number and its date had not been filled upon Form-31, for all practical purposes, it was a blankdeclaration form, therefore, the intention to evade tax wasinherent and the penalty has been validly imposed. 11. Learned Standing Counsel on the other hand submitsthat the duty and responsibility, to make completedisclosure of the goods being imported, was on theassessee, as he was the person who brought the goodsinside the State. The fact that the description of thegoods, invoice number and its date had not been filled upon Form-31, for all practical purposes, it was a blankdeclaration form, therefore, the intention to evade tax wasinherent and the penalty has been validly imposed. 12. Having heard learned counsel for the parties andhaving perused the records, in the first place, the Actclearly stipulates that a penalty under Section 15-A-(1)(O) of the Act may be imposed if the Assessing Officer issatisfied that the offending dealer had intention to evadetax. Such satisfaction must be recorded in the penaltyorder itself and not outside it. In the facts of the presentcase, other than mentioning the default noted by theAssessing Officer, as referred to above, there is nosatisfaction recorded of such intention to evade tax. Asatisfaction required to be reached by the Act, cannot bea matter of interference to be drawn in revisionproceedings but the same must be found to be inexistence on a plain reading of the order passed by theAssessing Authority. There can be no presumption onsuch satisfaction having been reached and there can beno argument to infer its presence. 13. Even otherwise, in the facts of the present case, itappears difficult to accept the presence of such intention,as the assessee is a 100% export oriented unit whoseexport sales were found to be exempt and there is noallegation that the assessee was engaged in trading ofgoods that were being imported. 14. Consequently, the revision succeeds. Accordingly, therevision is allowed. The order dated 19.3.2008 passed bythe Trade Tax Tribunal Noida, is set aside. The questionof law noted above is answered in negative i.e. in favourof the applicant-assessee and against the respondent-revenue. Order Date :- 5.7.2019Meenu