2009 (4) TMI 810 - AT - Central Excise

Summary

The Appellate Tribunal CESTAT NEW DELHI heard an appeal filed by the Revenue against the order of the Commissioner (Appeals) where penalties imposed on the Respondents were set aside. The case involved a shortage of M.S. Ingots and Runners & Risers detected during a stock verification by Central Excise Officers. The Respondents admitted to the clearance of goods without the issuance of invoices and payment of appropriate duty. The original authority confirmed the demand of duty and imposed penalties under Section 11AC of the Act. The Commissioner (Appeals) set aside the penalties, prompting the Revenue to file the appeals. The Revenue argued that the case involved clandestine removal of goods and that penalties were justified. The Respondents contended that the duty was deposited before the show cause notice, and that the penalties should be set aside. The Tribunal found that the case involved clandestine removal of goods, invoking Section 11AC of the Act. The Respondents' admission of clearance without payment of duty was considered a technical lapse, not an intentional fraud. The Respondents' deposit of duty before the show cause notice limited the penalty to 25% of the duty determined. The penalty on Respondent No. 2 was dismissed due to lack of evidence of his knowledge of the removal. The Tribunal set aside the Commissioner (Appeals) order against Respondent No. 1, restoring and modifying the original authority's decision, reducing the penalty to Rs. 38,732. The appeal against Respondent No. 2 was dismissed. The judgment was dictated and pronounced in open court by Shri P.K. Das, J.