2009 (12) TMI 788 - AT - Central Excise

Summary

Issues Involved:

1. Confiscation and penalties imposed u/s 11AC of the Central Excise Act, 1944.
2. Alleged denial of natural justice due to non-furnishing of documents.
3. Validity of penalties imposed under Section 11AC for periods prior to its enforcement.

Summary:

1. Confiscation and Penalties Imposed u/s 11AC:

The appeals arose from two orders dated 15-11-2001, which involved confiscation of excisable goods and imposition of penalties. The first order involved confiscation of 1030 MT of goods valued at Rs. 1,03,00,000/- with a redemption fine of Rs. 10,00,000/-, and penalties under Rule 173Q and Rule 226 of the Central Excise Rules, 1944, and Section 11AC of the Central Excise Act, 1944. The second order involved confiscation of 51.100 MT of goods valued at Rs. 3,66,135/-, with penalties under the same rules and section.

2. Alleged Denial of Natural Justice:

The appellants contended that the Commissioner erred by not furnishing copies of relevant documents annexed to the show cause notice and not returning unrelied documents seized during the investigation. The appellants argued that this denial violated principles of natural justice, citing various judicial precedents. The Commissioner, however, observed that sufficient opportunity was given to the appellants to identify the documents required for their defense, which they failed to do.

3. Validity of Penalties Imposed Under Section 11AC:

The appellants argued that penalties u/s 11AC could not be imposed as the provision came into force on 28-9-96, while the relevant periods were 1994-95 and 1995-96. The Tribunal agreed, stating that penalties under Section 11AC could not apply retrospectively.

Conclusion:

The Tribunal found that the department failed to return the unrelied documents seized from the appellants, which prejudiced their ability to prepare a defense. This failure constituted a denial of natural justice, warranting the setting aside of the impugned orders. The Tribunal directed the appellants to deposit the duty amount along with interest within four months and remanded the matter for fresh adjudication after returning the seized documents. The Tribunal also held that penalties u/s 11AC could not be imposed for periods prior to its enforcement. The appeals were allowed, and the matter was remanded for reconsideration with directions for expeditious disposal.