PRAVIN CORPORATION vs MUMBAI EAST

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI

WEST ZONAL BENCH, MUMBAI

Excise Appeal No. 86383 of 2016

(Arising out of Order-in-Original No. 27/SRK/PR.COMMR/M-II/2015-16 dated
17.02.2016 passed by the Principal Commissioner of Central Excise, Mumbai-II.)


M/s. Pravin Corporation ........Appellant
Gala No. 2, Anoto Industrial Estate,
Nityanand Nagar, Near Noorie Masjid,
Ghatkopar (W), Mumbai – 400 086

VERSUS

Commissioner of CGST &
Central Excise, Mumbai East
th
9 Floor, Piramal Chambers,
Jijibhoy Lane, Lalbaugh, Parel,
Mumbai – 400 012
........Respondent

AND

Excise Appeal No. 86861 of 2016

(Arising out of Order-in-Original No. 27/SRK/PR.COMMR/M-II/2015-16 dated
17.02.2016 passed by the Principal Commissioner of Central Excise, Mumbai-II.)


M/s. Sangita Distributors ........Appellant
8, Gulmohar Society, G P Road,
Khar (W), Mumbai – 400 052

VERSUS

Commissioner of CGST &
Central Excise, Mumbai East
th
9 Floor, Piramal Chambers,
Jijibhoy Lane, Lalbaugh, Parel,
Mumbai – 400 012
........Respondent

A PPERANCE :

Shri Stebin Mathew, Advocate for the Appellant
Ms. Bina Kawle, Superintendent, Authorised Representative for the
Respondent

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CORAM:
HON’BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)


FINAL ORDER NOS. 86082-86083/2026


Date of Hearing: 22.07.2026
Date of Decision: 03.09.2026


Legality of the confirmation of order passed by the Principal
Commissioner in confirming penalty is of ₹1,00,000/- each on both
Appellants in terms of Rule, 26 of the Central Excise Rules, 2002 is
assailed before this forum in these two appeals.

2. Fact of the case would go to show that both the Appellants,
proprietorship concerns, were engaged in trading of household
cleaning items like floor cleaners, detergent, soap, etc. manufactured
by M/s. Glaccay Consumer Care Pvt. Ltd. (GCC). Investigation
conducted at the manufacturing unit by the Central Excise Department
revealed that those manufactured goods were being cleared with a
brand name (GLACCAY) which did not belong to the manufacturer but
they were availing SSI exemption benefit available under Notification
No. 08/2003-CE dated 01.03.2003. In the process of investigation of
the premises of the manufacturer, Appellants were also searched and
their statements were recorded. As per the statements, after
purchase of goods from M/s. GCC they were selling to M/s. Star C.J.
of Grant Road and they were unaware of non-payment of Excise duty
on those goods. Show-cause notice dated 22.06.2015 was issued to
the manufacturer of GLACCAY consumer and others including these
two distributors proposing penalty under Rule, 26 of the Central Excise
Rules. Appellants’ unsuccessful attempt before the Adjudicating
Authority namely Principal Commissioner has brought the dispute to
the present forum.

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3. During course of hearing of the appeals, learned Counsel for the
Appellant Mr. Stebin Mathew submitted that Appellants were unaware
of the fact that goods purchased by them were not subjected to Excise
duty and were cleared under the benefit of Notification No. 08/2003-
CE but going by Rule, 26 the dual requirement prescribed for holding
a person guilt namely that they have dealt with the goods and had
knowledge of the fact that such goods were liable for confiscation, was
not established by the Department through any cogent evidence and
being distributor there was hardly any scope for them to know about
non-payment of duty at the factory gate at the time of clearance. In
citing case law recorded in 2014 (307) ELT 746 (Tri. - Mum) in the
case of Electron Industries Ltd. Vs. Commissioner of Central Excise,
Mumbai , he further submitted that it has been clearly held in the said
judgement that liability to pay duty lies with the manufacturer and not
on the buyer and hence buyer can’t be said to have violated any
provision of the law, for which the order passed by the Principal
Commissioner is required to be set aside.

4. Per contra , learned Authorised Representative Ms. Bina Kawle
argued in support of the reasoning and rationality available in the
order passed by the Principal Commissioner and pointed out that these
two Appellants were sole distributors of the said manufacturer M/s.
GCC, to whom the turnover is well known, since they deal exclusively
with the product after being manufactured and therefore, their
knowledge concerning non-payment of duty can never be ruled out.

5. I have gone through the appeal paper book and written
submissions filed by the adversaries. As could be noticed in para 49
of the order passed by the Principal Commissioner of Central Excise,
Mumbai-II, it has been mentioned that both Appellants Pravin Jain and
Sangita P. Jain, having separate proprietorship firm, were husband
and wife who were not paying house rent that was getting adjusted
against payment made to M/s. GCC and both are the owners of M/s.
GCC but this fact of ownership has not been established through the

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investigation that is referred in the show-cause notice, wherein
statement of the Director of M/s. GCC would go to reveal that M/s.
GCC was selling the finished goods to M/s. Sangita Corporation who
was engaged in trading of chemicals and distributing GLACCAY
household products. Similar statement concerning Pravin Jain’s
involvement with GCC is noted as a distributor but not both as owner
of M/s. GCC. This being the fact on record, adjustment of payment
against supply with rent of premises etc. are extraneous to the fact
since are not in violation of the accounting principles but what is
important to be seen here is that whether a distributor is under a legal
obligation to look into the proper/improper payment of duty at the
manufacturer’s end so as to hold him/her liable for such violation!
There is no such provision that would justify such fulfilment of duty as
a mandatory requirement by the supplier/subsequent purchaser and
Electron Industries Ltd. judgement, cited supra clearly dictates that
such liability to pay duty lies with the manufacturer and not with the
buyer, who can never be said to have violated any provision of law.
Hence the order.

THE ORDER

6. The appeals are allowed and the order passed by the Principal
Commissioner of Central Excise, Mumbai-II vide Order-in-Original No.
27/SRK/PR.COMMR/M-II/2015-16 dated 17.02.2016 is hereby set
aside with consequential relief, if any.

(Order pronounced in the open court on 03.09.2026)




(Dr. Suvendu Kumar Pati)
Member (Judicial)


Prasad