2011 (6) TMI 303 - AT - Central Excise

Confiscation of goods and imposition of redemption fine - The entire duty, interest was paid before issuance of Show Cause Notice - An option to pay all dues i.e. duty, interest and penalty equal to 25% of the duty within 30 days was given - The fact being so, the Commissioner(Appeals) s order reducing penalty to 25% of duty is seemingly sustainable. - Commissioner (Appeals) has relied upon the judgments of CCE Vs Akash Fashion Prints Ltd. (2009 -TMI - 33022 - GUJARAT HIGH COURT) - Decided against the revenue.

Summary

Issues:
1. Duty demand and penalty imposition on M/s Harmony Yarns Pvt. Ltd.
2. Appeals filed by M/s Harmony Yarns Pvt. Ltd. against the duty demand and penalties.
3. Appeal by Revenue against reduction of penalty by Commissioner(Appeals).

Analysis:

Issue 1: Duty demand and penalty imposition on M/s Harmony Yarns Pvt. Ltd.
The original adjudicating authority demanded a duty of Rs.1,55,250 along with interest and equal penalty due to a shortage of 75,000.035 kgs of texturised yarn at the factory premises of M/s Harmony Yarns Pvt. Ltd. Separate penalties were also imposed on others. M/s Harmony Yarns Pvt. Ltd. filed 3 appeals against this order. The Department also filed an appeal before the Commissioner(Appeals) for confiscation of goods and imposition of redemption fine. The Commissioner(Appeals) upheld the duty demand and reduced the penalty to Rs.38,813, being 25% of the duty demanded.

Issue 2: Appeals filed by M/s Harmony Yarns Pvt. Ltd. against the duty demand and penalties
The Revenue filed an appeal against the reduction of penalty by the Commissioner(Appeals). Upon review, it was found that the entire duty and interest were paid before the issuance of the Show Cause Notice. The Commissioner(Appeals) had given an option to pay all dues, including duty, interest, and penalty equal to 25% of the duty within 30 days. The Commissioner(Appeals) relied on various judgments to support the decision, including CCE Vs Akash Fashion Prints Ltd. and others. The assessee had already paid the duty on the date of search and paid the penalty at the reduced rate within the prescribed time.

Issue 3: Appeal by Revenue against reduction of penalty by Commissioner(Appeals)
During the proceedings, the ld.SDR for the Revenue conceded to the legality of reducing the penalty to 25%. The Tribunal, after considering the facts and the legal precedents cited, agreed with the findings of the Commissioner(Appeals). The Tribunal found that the orders relied upon by the Commissioner(Appeals) adequately supported the decision to reduce the penalty. Consequently, the appeal filed by the Revenue was rejected as it did not survive based on the facts and legal arguments presented.

This comprehensive analysis outlines the key issues of duty demand, penalty imposition, appeals by the concerned parties, and the final decision of the Tribunal based on the legal and factual considerations presented during the proceedings.