2009 (10) TMI 786 - AT - Central Excise

Summary

Issues:
1. Adjudication of show-cause notice invoking extended period of limitation under Section 11A(1) of the Central Excise Act for duty recovery on allegedly clandestinely removed finished goods.
2. Confirmation of demand of duty, interest, and penalty under Sections 11A, 11AB, and 11AC.
3. Payment of 25% penalty amount within 3 months from receipt of Order-in-Original.
4. Appeal challenging penalty imposition under Section 11AC.
5. Penalty imposition under Rule 26 of the Central Excise Rules, 2002 on a director.

Issue 1:
In the adjudication of the show-cause notice invoking the extended period of limitation under Section 11A(1) of the Central Excise Act for the recovery of duty on allegedly clandestinely removed finished goods, the original authority confirmed a demand of duty, interest, and penalty against the appellant. The appellant challenged the penalty imposition under Section 11AC in the appeal.

Issue 2:
The original authority confirmed the demand of duty against the appellant under Section 11A(2) of the Act with interest under Section 11AB and imposed a penalty under Section 11AC. The Commissioner (Appeals) held that the appellant was not required to pay any further penalty amount under Section 11AC after the appellant deposited 25% of the penalty within 3 months from the receipt of the Order-in-Original. The appeal filed by the appellant against the penalty imposition was dismissed as no valid grounds were raised.

Issue 3:
In the subsequent appeal filed by the assessee, the Commissioner (Appeals) sustained the penalty to the extent of 25% under Section 11AC, and no further penalty amount was deemed necessary to be paid. The appellant challenged the penalty imposition under Section 11AC, similar to the grounds considered in the previous appeal. The findings from the previous appeal were held applicable, resulting in the dismissal of the appeal.

Issue 4:
Regarding the penalty imposed under Rule 26 of the Central Excise Rules, 2002 on a director of the company, the appeal challenged the penalty imposition. The rule mandates a penalty for being involved in dealing with excisable goods liable to confiscation under the Act or Rules. However, no finding suggested the director's involvement in dealing with such goods knowingly or believing they were liable to confiscation. Consequently, the penalty imposed under Rule 26 was deemed unsustainable, leading to the allowance of the appeal.

This detailed analysis of the judgment provides insights into the issues raised, the legal provisions applied, and the outcomes of the appeals concerning duty recovery, interest, and penalty imposition under the Central Excise Act and Rules.