2004 (5) TMI 370 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty on the appellant.
2. Provisionality of assessment in relation to duty confirmation.
3. Applicability of penalty due to provisional clearances.

Analysis:
1. The appellant was required to pre-deposit a penalty amount under Rule 96ZO(1) for the purpose of hearing the appeal. The duty amount had been confirmed earlier, and the penalty imposition was pending. The penalty was eventually imposed after the disposal of the duty matter. The appellant argued that since the clearances were provisional and the assessment had not been finalized, the penalty should not be imposed. However, the DR contended that this argument should have been raised during the proceedings confirming the demands and not during the penalty proceedings. The tribunal agreed with the DR, stating that the issue of provisionality should have been raised earlier. Therefore, the tribunal upheld the imposition of the penalty, directing the appellant to pre-deposit a specified amount within a given timeframe to avoid dismissal of the appeal under Section 35F of the Act.

2. The tribunal emphasized that the aspect of provisionality of assessment should have been addressed during the proceedings where the demands were confirmed. It was deemed too late to raise this issue during the penalty appeal. The tribunal clarified that the penalty matter was distinct from the duty confirmation issue, and since the duty amount had already been confirmed, the penalty was deemed leviable. The tribunal highlighted that the appellant had been given terms in a similar matter, justifying the imposition of the penalty in the present case. The tribunal's decision to direct the pre-deposit of a specific amount and waive the balance of the penalty was contingent upon timely compliance by the appellant.

3. The tribunal's decision was based on the understanding that the penalty proceedings were separate from the duty confirmation process. The tribunal reiterated that the appellant's failure to raise the provisionality argument earlier precluded them from challenging it during the penalty appeal. By directing the appellant to pre-deposit a portion of the penalty amount, the tribunal aimed to ensure compliance and avoid dismissal of the appeal. The tribunal set a deadline for the deposit and specified the consequences of non-compliance, emphasizing the importance of adhering to the procedural requirements under the Act. Compliance was scheduled to be reviewed on a specified date to monitor the appellant's adherence to the tribunal's directives.