2009 (11) TMI 721 - AT - Central Excise

Summary

Issues:
1. Determination of duty amounts and penalties pursuant to remand by the Tribunal.
2. Methodology adopted for valuation of goods removed clandestinely without payment of duty.
3. Imposition of penalties on proprietary concerns and proprietors.
4. Imposition of penalty under Section 11AC of the Central Excise Act, 1994, and other provisions of law.

Analysis:

Issue 1: Determination of duty amounts and penalties pursuant to remand by the Tribunal
The appeals arose from an order passed by the Commissioner, Central Excise, Delhi-II, following a remand by the Tribunal in previous appeals. The Tribunal had directed the Original Authority to determine duty amounts and penalties afresh. The Tribunal's observation indicated that the assessable value adopted for duty paid goods could constitute the assessable value for clandestinely removed goods as well. The Commissioner, in the impugned order, calculated duty liability based on this valuation method.

Issue 2: Methodology for valuation of goods removed clandestinely
The advocate for the appellants raised concerns about the methodology adopted for valuing goods removed clandestinely without duty payment. However, the Tribunal clarified that the scope of adjudication before the Adjudicating Authority was limited to the remand order's directives. The Commissioner's order reflected the adoption of a similar valuation method for clandestinely removed goods as for duty-paid goods, leading to the calculation of duty liability.

Issue 3: Imposition of penalties on proprietary concerns and proprietors
The advocate argued that penalties imposed on proprietary concerns and proprietors separately were not justified. It was established that in the case of proprietary concerns, penalties should not be imposed on both the firm and the proprietor separately. Consequently, penalties imposed on proprietary concerns M/s. MIL, M/s. Minocha Brothers, and M/s. RKTC were deemed excessive and were quashed.

Issue 4: Imposition of penalty under Section 11AC and other provisions
The Commissioner had imposed penalties under Section 11AC of the Central Excise Act, 1994, and other provisions of law. The penalties under Section 11AC were found to be equivalent to the duty amount and were deemed justified. However, penalties imposed under various other provisions of law were considered unsustainable as no justification was provided. Therefore, penalties imposed under other provisions of law were quashed, leading to modifications in the penalties imposed on M/s. MMPL, M/s. MAI, and M/s. Minocha Brothers.

In conclusion, apart from the modifications discussed above, no further interference was warranted in the impugned order, and the appeals were disposed of accordingly.