2007 (11) TMI 543 - AT - Central Excise

Summary

Issues:
1. Duty demand confirmation with penalty and interest.
2. Imposition of penalty on Vice President of the Appellant-Company.
3. Central Excise duty demand and recovery.
4. Interest charge and recovery.
5. Imposition of penalty under Cenvat Credit Rules and Central Excise Rules.

Analysis:

Issue 1: Duty Demand Confirmation with Penalty and Interest
The Appellant appealed against the order confirming duty demand of Rs. 11,67,532/- with penalty and interest. The ld. Commissioner imposed a penalty of Rs. 5,00,000/- on the Vice President of the Appellant-Company. However, the appeal did not include the Vice President's petition, so the appeal was considered for the company only.

Issue 2: Imposition of Penalty on Vice President
The penalty imposed on the Vice President was not part of the appeal, as there was no petition from him. The appeal was solely focused on the Appellant-Company.

Issue 3: Central Excise Duty Demand and Recovery
The Appellant was asked to show cause regarding the duty demand, interest, and penalty. The ld. Commissioner concluded that the demand was justified based on various submissions. The demand arose from the shortage of finished goods, removal of assorted inputs, and clandestine removal of M.S. Ingots.

Issue 4: Interest Charge and Recovery
Interest at an appropriate rate was charged and recovered from the Appellant as per Section 11AB of the Act.

Issue 5: Imposition of Penalty under Cenvat Credit Rules and Central Excise Rules
Penalties were imposed under Rule 13 (1&2) of Cenvat Credit Rules, 2002, Rule 25 of the Central Excise Rules, 2002, and Section 11AC of the Act. The ld. Commissioner considered various submissions by the Appellant but upheld the demand and penalties based on the evidence presented.

The Appellate Tribunal found discrepancies in the impugned order, especially in the lack of specific allegations and a speaking order. The order did not provide a clear breakdown of the duty involved in each allegation, leading to legal infirmities. The Tribunal noted issues with the investigation and evidence presented, highlighting violations of natural justice and the need for a proper process.

The Tribunal upheld some demands related to inputs and finished goods based on evidence and admissions by the Appellant. However, it found deficiencies in the investigation regarding certain allegations, leading to the rejection of a significant duty demand. The Tribunal directed the Appellant to pay a reduced penalty, considering the upheld allegations.

In conclusion, the appeal was partly allowed, with the Tribunal addressing the legal infirmities in the impugned order and making specific determinations on the duty demands and penalties involved in the case.