2011 (4) TMI 801 - AT - Central Excise

Penalty u/s 11AC read with Rule 25 - removal of the goods without payment of duty using parallel invoices - Held that - The order of the original authority has not given any finding as to why no penalty under section 11AC was imposed - The Commissioner (Appeals) in his order dated 27.8.2009 has chosen to set aside the order of the original authority which inter-alia confirmed the demand of duty - The corrigendum issued by him is also not clear - As the order of the original authority is silent on the issue of applicability of section 11AC and the order of the Commissioner (Appeals) and corrigendum are vague, set aside the order of the Commissioner (Appeals) and the order of the original authority and remand the mater to the original authority for fresh consideration and to pass a speaking order on all issues after granting a reasonable opportunity of hearing to he respondents.

Summary

Issues:
Appeal against Commissioner (Appeals) order - imposition of penalty under Section 11AC, Central Excise Act, 1944.

Analysis:
The department filed an appeal against the Commissioner (Appeals) order, challenging the imposition of penalties under Section 11AC of the Central Excise Act, 1944. The case involved allegations of removal of goods without duty payment using parallel invoices. The original authority confirmed a duty demand and imposed penalties on the respondent company and its Managing Director. The department contended that penalties under Section 11AC should have been imposed due to the clandestine clearance of goods. The Commissioner (Appeals) set aside the original authority's order, leading to confusion regarding the penalty imposition. The corrigendum issued by the Commissioner (Appeals) further complicated the matter, prompting the department to seek a review. However, the Tribunal found both the original authority's order and the Commissioner (Appeals) decision lacking clarity on the application of Section 11AC penalties. As a result, the Tribunal remanded the case back to the original authority for a fresh consideration and a detailed decision on all issues, emphasizing the importance of providing a fair hearing to the respondents. The Tribunal clarified that its decision did not reflect any opinion on the case's merits.

This detailed analysis highlights the procedural complexities and legal nuances involved in the case, focusing on the interpretation and application of penalties under Section 11AC of the Central Excise Act, 1944. The Tribunal's decision to remand the case for a fresh consideration underscores the significance of clarity and thoroughness in adjudicating matters related to duty evasion and penalty imposition.