2005 (9) TMI 381 - AT - Central Excise

Summary

Issues:
1. Conflict in interpretation and application of Larger Bench decision in cases under the Customs Act, 1962.
2. Reference to the Hon. President to constitute a Larger Bench to resolve the conflict.

Analysis:
1. The judgment addresses a conflict arising from the interpretation and application of the Larger Bench decision in cases under the Customs Act, 1962. The appellant's advocate relied on the decision in the case of Jindal Vijaynagar Steel Ltd., which set aside penalties under the Customs Act, 1962, due to duties being discharged before the show cause notice was issued for alleged clandestine removal of goods. On the other hand, the ld. DR relied on the decision in the case of M/s. Saheli Synthetic Pvt. Ltd. & others, where it was held that the Larger Bench decision in the case of Machino Montell (I) Ltd. would not absolve penalty consequences in cases involving clandestine removal. The conflict arose as both decisions interpreted the Larger Bench decision differently, leading to a need for clarification on the application of the Larger Bench decision in such cases.

2. In light of the conflict in interpretation, the judgment suggests referring the matter to the Hon. President to constitute a Larger Bench to resolve the differences. The proposed question for reference to the Larger Bench is whether the decision in the case of Machino Montell Ltd. would apply to penalties under the Customs Act, 1962, as decided in the case of Jindal Vijaynagar Steel, or if it would not apply, as held in the case of M/s. Saheli Synthetics Pvt. Ltd. The directive to place the file before the Hon'ble President for orders indicates the need for a higher authority to address and clarify the conflicting interpretations of the Larger Bench decision in the context of penalties under the Customs Act, 1962.

This judgment highlights the importance of resolving conflicts in legal interpretations to ensure consistency and clarity in the application of laws, especially in cases involving penalties under specific statutes like the Customs Act, 1962.