2010 (7) TMI 359 - AT - Central Excise

Confiscation clandestine removal submission that assessee not repeated offender and harsh action of confiscation of land, plant & machinery not justified Matter earlier remanded by Commissioner (Appeals) for re-adjudication Provisions for confiscation of plant & machinery deleted from statue book w.e.f. 12-5-2000 by Notification No. 30/2000-C.E hence not available to adjudicating authority at time of re-adjudication Action taken by authority bad in law confiscation of land, plant & machinery set aside

Issues:
1. Confirmation of demand of duty and imposition of penalty based on clandestine clearance.
2. Remand proceedings and imposition of penalties on manufacturing units and directors.
3. Rejection of refund claim and imposition of penalties on directors.
4. Confiscation of plant, building, land, and machinery with redemption fine.
5. Challenge against penalties imposed on directors without separate appeals.

Issue 1: Confirmation of demand of duty and imposition of penalty based on clandestine clearance:
The case involved M/s. Choice Ceramic Tiles Pvt. Ltd. and M/s. Sompura Tiles Pvt. Ltd. engaged in manufacturing glazed tiles. Central Excise Officers found evidence of clandestine clearance during a visit to their factories. Proceedings were initiated for duty demand confirmation and penalty imposition due to exceeding small scale exemption benefit. The original adjudicating authority confirmed the demand against M/s. Sompura Tiles Pvt. Ltd. and imposed penalties on its directors. The matter was remanded by the Commissioner (Appeals) for de novo decisions.

Issue 2: Remand proceedings and imposition of penalties on manufacturing units and directors:
During de novo adjudication, the Assistant Commissioner dropped proceedings against all appellants. However, the Commissioner (Appeals) confirmed duty demand against both manufacturing units. Penalties were imposed on the companies and directors. The penalties were upheld in subsequent proceedings, leading to appeals before the Tribunal by the manufacturing units against the penalties imposed.

Issue 3: Rejection of refund claim and imposition of penalties on directors:
One appeal was against the rejection of a refund claim by M/s. Choice Ceramic Tiles Pvt. Ltd. when the demand was dropped. Other appeals were by directors against penalties imposed in de novo proceedings. The advocate representing the appellants did not contest the duty demands but requested an option to deposit the dues, interest, and reduced penalty based on legal precedents. The Tribunal confirmed duty demands and penalties but granted an option to deposit dues within a specified period.

Issue 4: Confiscation of plant, building, land, and machinery with redemption fine:
The authorities had confiscated the assets of the manufacturing units with an option for redemption on payment of a fine. The advocate argued against the confiscation, citing a Tribunal decision and the deletion of relevant provisions from the Central Excise Rules. The Tribunal agreed with the advocate, setting aside the confiscation of assets due to the unavailability of confiscation provisions at the time of adjudication.

Issue 5: Challenge against penalties imposed on directors without separate appeals:
The Tribunal noted that the Revenue had not challenged the order dropping demands and vacating the show cause notice in respect of the directors. As no separate appeals against the directors were filed, the imposition of penalties on them during remand proceedings was deemed improper. Therefore, the penalties imposed on the directors were set aside by the Tribunal, concluding all appeals in the mentioned terms.

This detailed analysis of the judgment covers the key issues involved in the case, outlining the legal proceedings, decisions, and arguments presented by the parties involved.

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