2010 (1) TMI 1001 - AT - Central Excise

Summary

Issues:
1. Challenge against penalty and redemption fine imposed under Section 11AC of the Central Excise Act.
2. Allegations of contravention of Central Excise Rules and intention to evade payment of duty.
3. Invocation of extended period of limitation for duty demand.
4. Applicability of Sections 11AB and 11AC in the case.
5. Justification for interest on duty and penalty imposition.

Analysis:
1. The appeal was filed challenging a penalty and redemption fine imposed under Section 11AC of the Central Excise Act. The appellant contested the penalty and fine but did not provide any representation or request for adjournment. The Appellate Commissioner upheld the order of adjudication confirming a demand against the appellant for clandestinely removed excisable goods. The original authority invoked the extended period of limitation for demanding duty and imposed a penalty equal to the duty amount under Section 11AC. Additionally, redemption fines were imposed in lieu of confiscation of trucks and goods.

2. The show-cause notice alleged contravention of various Central Excise Rules with the intention to evade duty payment. The appellant was found to have clandestinely removed goods and suppressed facts before the department. The duty was paid voluntarily, but the dispute centered on the demand for interest on duty and penalty imposition. The appellant argued lack of intent to evade duty payment, claiming ignorance of dutiability. However, the appellant's conduct was deemed clandestine, justifying interest under Section 11AB and penalty under Section 11AC.

3. The invocation of the extended period of limitation under the proviso to Section 11A(1) was based on the clandestine removal of goods during a specific period. The duty was paid after the show-cause notice, and the appellant's argument against interest and penalty imposition was rejected. The Supreme Court precedent highlighted that penal liability under Section 11AC is established in cases of clandestine removal, irrespective of duty payment timing.

4. The appellant's assertion of no intent to evade duty payment was dismissed, as clandestine removal inherently involves such intent. The interception of trucks carrying goods without proper documentation indicated suppression of facts. The appellant's failure to follow Central Excise procedures supported the allegations of evasion and contravention, justifying interest and penalty imposition under Sections 11AB and 11AC.

5. Ultimately, the appeal failed, and the decision was upheld, dismissing the appellant's claims against interest on duty and penalty imposition. The judgment reinforced the penal liability under Section 11AC in cases of clandestine removal, emphasizing the importance of adherence to Central Excise regulations and procedures to avoid such penalties.