2011 (2) TMI 995 - AT - Central Excise

Quantum of Penalty under Rule 26 of Central Excise Rules, 1944 - contention against penalty equal to 100% of duty stand imposed on the manufacturing unit without any option to pay 25% - Held that - As no option to pay 25% of duty within 30 days from the date of passing of the impugned order stand extended by the lower authority, we extend such option. If the appellants pay all the dues within a period of 30 days from today, the penalty shall stand reduced to 25%. As regards penalty of Rs.2 lakhs imposed upon Shri Haritpal Singh Hora, Director the lower authorities have discussed his role in detail and have attributed willful suppression of information with intent to hide clandestine removal of excisable goods with an intention to evade payment of duty. As such he is liable to penalty under Rule 26 of Central Excise Rules, 1944 - penalty reduced to Rs.1 lakh.

Summary

Issues: Duty confirmed for clandestine removal, Penalty imposition without option to pay 25%, Reduction of penalty for Director, Stay petitions and appeals disposal.

In this judgment by the Appellate Tribunal CESTAT, AHEMDABAD, the issue of duty confirmed for clandestine removal was addressed. The advocate for the appellants did not contest the duty confirmed against them, leading to the confirmation of duty along with interest as it was not challenged. The penalty imposition without the option to pay 25% was also raised. The advocate referred to a previous Tribunal decision and requested an option to deposit 25% of the penalty within 30 days, which was granted by the Tribunal. The imposition of a penalty equal to 100% of duty was upheld, citing the law declared by the Hon'ble Supreme Court in a specific case. However, the Tribunal extended the option to pay 25% of duty within 30 days, resulting in a reduction of the penalty to 25% if all dues were paid within the specified timeframe.

Regarding the penalty imposed on the Director, it was found that willful suppression of information with the intent to hide clandestine removal of goods for duty evasion was attributed to him. The penalty was imposed under Rule 26 of Central Excise Rules, 1944. Despite reducing the penalty from Rs.2 lakhs to Rs.1 lakh due to the overall facts and circumstances of the case, the Director's appeal was rejected except for the modification in the quantum of penalty. The judgment concluded by stating that both the stay petitions and appeals were disposed of in the above manner, bringing closure to the legal proceedings.