2005 (6) TMI 350 - AT - Central Excise

Summary

Issues: Duty demand confirmation, imposition of penalties, undertaking discharge, registration based on undertaking, past transactions liability.

In this case, the Appellate Tribunal CESTAT, Mumbai, addressed the issue of duty demand confirmation and imposition of penalties by the Commissioner of Central Excise against the respondents. The Commissioner had confirmed duty demand for a specific period and imposed penalties but dropped proceedings for recovery of a certain amount related to past transactions. The Revenue contended that the duty demand should have been confirmed against the respondents as they had undertaken to discharge all duty liabilities. The Tribunal noted that the respondents were issued registration based on an undertaking to discharge all liabilities of Central Excise related to past transactions of another entity. The Tribunal agreed with the Revenue's argument and held that the duty amount payable by the previous entity should be confirmed against the present respondents. Consequently, the impugned order dropping the demand against the respondents was set aside, and the appeal was allowed.

The judgment highlights the significance of registration based on undertakings in determining liability for duty demands. It underscores the principle that successors assuming possession of a factory are responsible for discharging duty liabilities related to past transactions of the previous entity. The Tribunal's decision emphasizes the importance of honoring commitments made in undertakings and upholding accountability for past obligations in Central Excise matters. The case serves as a reminder of the legal implications of taking over possession of a factory and the associated duty liabilities that must be fulfilled by the succeeding entity.