2001 (11) TMI 806 - Commissioner - Central Excise

Summary

Issues:
Appeal against imposition of penalty under Section 11AC by the Commissioner (Appeals) on a company engaged in the manufacture of CTD bars, angles, flats falling under Chapter 72 for clearing goods without payment of duty.

Detailed Analysis:

1. Background and Facts:
The case involves an appeal filed by a company against the imposition of a penalty of Rs. 77,341 under Section 11AC by the Joint Commissioner of Central Excise. The company, engaged in manufacturing CTD bars, angles, and flats, was found to have cleared goods without paying duty during a road patrol. A show cause notice was issued, adjudicated, and appealed, resulting in the rejection of the company's appeal and remand of the department's appeal for re-examination.

2. Grounds of Appeal:
The appellant contended that there was only a procedural lapse without any intention to evade duty. They argued that penalties and fines had already been imposed under Rule 173Q, making the imposition of penalty under Section 11AC unwarranted. The company sought to set aside the impugned order based on these grounds.

3. Legal Considerations:
During the hearing, the advocate representing the company presented case laws to support their arguments. The presiding authority carefully considered all facts, including previous orders, case records, and citations. The key question was whether the penalty under Section 11AC was justifiable in the circumstances of the case.

4. Decision and Rationale:
Upon review of the case records and arguments, it was observed that there was no intention to evade duty as evidenced by the preparation of invoices, weighing slips, and other documentation by the company. The advocate highlighted that there was a procedural lapse in not debiting the duty amount before clearance, which was acknowledged by the department. Referring to a relevant case law, the presiding authority noted that penalties under Rule 173Q were appropriate in such cases, rather than under Section 11AC for fraud or wilful misstatement.

5. Judicial Precedent and Decision:
Citing the precedent where a similar penalty imposition was set aside by the Tribunal, the presiding authority ruled in favor of the appellant. The decision was based on the lack of fraudulent intent, the proper documentation maintained by the company, and the imposition of penalties under Rule 173Q. Consequently, the penalty under Section 11AC was vacated, and the impugned order was set aside, allowing the appeal.

In conclusion, the judgment highlights the importance of assessing the specific circumstances of a case to determine the appropriate penalties under relevant legal provisions, ensuring that justice is served without imposing undue burdens on the parties involved.