2004 (2) TMI 502 - AT - Central Excise

Summary

Issues: Penalty under Rule 173Q of Central Excise Rules

Analysis:
The appellants filed an appeal against the Order-in-Appeal imposing a penalty of Rs. 1 lakh under Rule 173Q of Central Excise Rules. The case involved the clearance of goods under Notification No. 108/95-C.E. without payment of duty, subject to the condition of producing a specific certificate. The appellants failed to produce the required certificate at the time of clearance in 1999 but submitted it during the appeal hearing in 2002. The Commissioner (Appeals) accepted the certificate but imposed a penalty. The appellants contested the penalty solely on the grounds of no demand, arguing its unsustainability.

Upon review, it was found that the appellants had indeed not complied with the notification condition during the goods' clearance, rendering them liable for penal action. The appellate tribunal agreed with the lower authorities, reducing the penalty to Rs. 50,000 from the initial Rs. 1 lakh. The appeal was disposed of, affirming the liability for penalty but adjusting the amount based on the circumstances presented.

This judgment highlights the importance of complying with statutory requirements at the time of clearance to avoid penal consequences, even if subsequent compliance is achieved. The tribunal's decision emphasizes the significance of adherence to notification conditions and the consequences of non-compliance, underscoring the need for strict adherence to regulatory provisions in excise matters.