2008 (6) TMI 517 - AT - Central Excise

Summary

Issues involved: Appeal against demand of duty, imposition of penalties under Section 11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2002.

Analysis:
The case involved an appeal arising from a common order regarding the manufacture of Hot Rolled Products of Non-Alloy Steel. The Central Excise officers found a shortage of raw material and finished goods during a stock verification, leading to a demand of duty amounting to Rs. 48,800. Additionally, an allegation was made that goods were cleared without payment of duty amounting to Rs. 17,760. The Adjudicating Authority confirmed the duty demand and imposed penalties under Section 11AC of the Act and Rule 25 of the Rules. The Commissioner (Appeals) modified the order, setting aside the demand of duty of Rs. 17,760 and reducing the penalties. The assessee appealed for setting aside the penalty, while the Revenue appealed for enhancement of penalties.

Upon review, the Judge noted that the demand of duty of Rs. 17,760 was set aside by the Commissioner (Appeals) with no appeal filed by the Revenue. The demand of duty of Rs. 48,800 was based on the shortage detected during stock verification. The Revenue argued for the imposition of penalty under Section 11AC for goods removed without payment of duty. However, the Judge disagreed, citing a High Court case precedent that highlighted the absence of evidence of clandestine removal or fraud. Consequently, the penalty under Section 11AC was set aside. Nevertheless, the Judge upheld the penalty under Rule 25 for the violation of rules. The Revenue's appeal was rejected, and the assessee's appeal was disposed of accordingly.

In conclusion, the judgment resolved the issues related to the demand of duty, imposition of penalties under Section 11AC of the Central Excise Act, 1944, and Rule 25 of the Central Excise Rules, 2002, providing a detailed analysis based on the facts and legal precedents cited during the proceedings.