2011 (3) TMI 141 - HC - Central Excise

SSI Exemption - Confiscation - Penalty - exemption was not available to the specified goods bearing the Brand Name or Trade Name of another person - There was dispute regarding liability of payment of duty - Therefore, imposition of penalty was found to be not justified - The learned Commissioner (Appeals) has reduced the amount of penalty, which order has been affirmed in appeal - Appeal is dismissed

Summary

Issues:
1. Confiscation of branded goods and imposition of penalty.
2. Reduction of penalty amount by the Commissioner (Appeals).
3. Jurisdiction of the Tribunal in upholding Commissioner (Appeals) orders.
4. Correction of errors in ROM filed by the Department.
5. Justification of passing two self-contradictory final orders.
6. Imposition of penalty under Section 11AC of the Central Excise Act, 1944.

Confiscation of branded goods and imposition of penalty:
The case involved the confiscation of Valves & Cocks bearing the brand name 'KIRTI' and the imposition of central excise duty and penalty. The goods were seized due to the belief that they were liable for confiscation as they bore a brand name registered under another person's name. The Adjudicating Authority imposed a penalty and confirmed the central excise duty demand. Subsequent appeals led to a reduction in the penalty amount by the Commissioner (Appeals), which was further challenged by the Revenue before the Tribunal.

Reduction of penalty amount by the Commissioner (Appeals):
The Commissioner (Appeals) reduced the penalty amount from Rs.1,37,560/- to Rs.25,000/-. This reduction was contested by the Revenue in appeals before the Tribunal, questioning the jurisdiction of the Tribunal to uphold the Commissioner's orders when findings of penalty reduction were set aside.

Jurisdiction of the Tribunal and Correction of errors:
The Tribunal faced questions regarding its jurisdiction in upholding the Commissioner (Appeals) orders, correcting errors in the ROM filed by the Department, and passing two self-contradictory final orders on the same set of appeals. The Tribunal was also asked whether it could impose a penalty lesser than the evaded duty amount under Section 11AC of the Central Excise Act, especially in cases of clandestine removal of goods bearing another person's brand name.

Imposition of penalty under Section 11AC of the Central Excise Act, 1944:
The applicant-appellant argued that as per Section 11AC of the Central Excise Act, 1944 and the Supreme Court judgment in Union of India Vs. Rajasthan Spinning & Weaving Mills, the penalty should be equal to the duty evaded. The reduction of penalty to Rs.25,000/- was deemed unjustified due to the liability dispute regarding duty payment. The Tribunal found no substantial question of law arising and dismissed the appeal based on the affirmed penalty reduction order.

In conclusion, the judgment addressed various issues concerning the confiscation of branded goods, penalty imposition, jurisdiction of the Tribunal, correction of errors, and the justification of penalty amounts under the Central Excise Act. The decision to dismiss the appeal was based on the lack of substantial legal questions arising from the penalty reduction affirmed by the Commissioner (Appeals).