2015 (6) TMI 986 - AT - Central Excise

Liability of duty on account of non-accountal shortage of goods - Held that - Record reveals that ld. adjudicating authority penalized the appellant under Rule 25 read with Section 11AC of Central Excise of 1944. Rule 25 of Central Excise Rules, 2002 deals with circumstances in which penalty can be imposed taking shelter of section 11AC of Central Excise Act, 1944. The present case is a case which is concerned for non-accountal of excisable goods manufactured or stored by the appellants. It is in respect of shortage noticed in the course of inventory during investigation. When such is the event this is a case inviting penal provision of section 11AC with the aid of Rule of 25 Central Excise, 2002. Therefore, the appeal is remanded to the Commissioner (Appeals) to reconsider the provision of law relating to penalty and pass appropriate order granting fair opportunity of hearing to the appellant. In this case the appellant has contested duty liability and consequently imposition of penalty. This Tribunal has not given any finding on the issue of duty liability. Therefore, recall the order of this Tribunal dated 21-10-2014 and direct the registry to relist the appeal to be heard on merits.

Summary

Issues: Application for rectification of mistake in the order passed by the Tribunal regarding duty liability, penalty imposition, and remand to reconsider the penalty provisions.

Analysis:
1. The applicant filed an application for rectification of mistake in the Tribunal's order, contesting duty liability due to non-accountal shortage of goods found during inspection based on estimate weighment. The Tribunal had remanded the matter to the Commissioner (Appeals) to reconsider penalty provisions, as there was no evidence of clandestine removal of goods, reducing the penalty imposed. The Tribunal's order was challenged on the grounds that the issue of penalty was not in question, and the focus should have been on the absence of evidence for clandestine removal, leading to no duty or penalty imposition.

2. The Tribunal's order revealed that the penalty was imposed under Rule 25 read with Section 11AC of the Central Excise Act, 1944, for non-accountal of excisable goods during inventory, inviting penal provisions. The appeal was remanded to the Commissioner (Appeals) to reassess penalty provisions and provide a fair hearing to the appellant. The Tribunal did not provide a finding on duty liability, leading to the recall of the order for a reevaluation of the case on its merits, directing the appeal to be relisted for further consideration.

3. The application for rectification of mistake was allowed, emphasizing the need for a comprehensive review of duty liability and penalty imposition, ensuring a fair opportunity for the appellant to present their case. The Tribunal's decision to remand the matter for reconsideration of penalty provisions based on the absence of evidence of clandestine removal was a key point of contention, leading to the recall of the order for a detailed examination of duty liability and penalty imposition. The rectification of mistake was granted, highlighting the importance of a thorough analysis of the legal provisions concerning duty and penalty in excise matters.