2008 (12) TMI 592 - AT - Central Excise

Summary

Issues:
1. Reduction of penalty under Rule 173Q and Section 11AC by Commissioner (Appeals).
2. Applicability of penalty provisions for the period beyond 1995-96.
3. Determination of penalty amount under Section 11AC for the period after 28-9-96.

Analysis:
1. The appeal was filed by the revenue challenging the reduction of penalty by the Commissioner (Appeals) under Rule 173Q and Section 11AC. The respondents, engaged in manufacturing RCC Pipes and collars, admitted to reducing the price in the name of transportation cost, which exceeded the actual transportation cost. The original authority imposed a penalty under Rule 173Q read with Section 11AC, which was later reduced by the Commissioner (Appeals) to Rs. 50,000 considering the non-applicability of Section 11AC before 28-9-96 and the voluntary deposit made by the respondents.

2. The revenue contended that for the period beyond 1995-96, Section 11AC should apply mandatorily, and a penalty equivalent to the duty evaded during this period should be imposed. They argued that the reduction based on voluntary deposit was incorrect as the duty was paid only after being pointed out by the department.

3. The Tribunal found that the respondents' admission of claiming excessive transport charges indicated an intention to evade duty, rendering voluntary payment insufficient to absolve them from penalties. It was noted that Section 11AC mandated penalties after 28-9-96, but as the specific amount was not quantified, the matter was remanded to the Commissioner (Appeals) for determining the penalty amount under Section 11AC for the period after 28-9-96. The penalty upheld by the Commissioner (Appeals) at Rs. 50,000 was considered as imposable under Rule 173Q before 28-9-96. The appeal was partly allowed, emphasizing the necessity to determine the duty involved and impose penalties accordingly.

This detailed analysis covers the issues related to the reduction of penalties, applicability of penalty provisions, and determination of penalty amounts under Section 11AC as addressed in the legal judgment by the Appellate Tribunal CESTAT, Mumbai.