2011 (6) TMI 430 - AT - Central Excise

Appeal filed by Revenue on the ground that the original authority having confirmed the demand should have imposed penalty u/s 11AC instead of imposing penalty under Rule 27 of the Central Excise Rules - Commissioner vide order dated 25.10.07 rejected the departmental appeal after taking note of the fact that the order dated 27.10.06 of the original authority imposing demand under Rule 27 already stands set aside by Commisioner vide order dated 31.01.07 and order of the original authority stands merged with the said order of the Commissioner (Appeals) dated 31.1.07. - appeal against order of Commissioner dated 31.01.07 stands rejected by Tribunal vide order dated 17.03.09 - Held that - Order of the original authority demanding duty under Rule 27 stands totally set aside by the Commissioner (Appeals) and appeal against the said order to the Tribunal by the department also stands rejected. Under these circumstances, the question of entertaining appeal by the Tribunal against the order dated 25.10.07 of the Commissioner (Appeals) rejecting the appeal seeking enhancement of penalty imposed by the original authority cannot be entertained.

Summary

Issues:
1. Confirmation of demand and penalty by the original authority.
2. Appeal against the order of the original authority.
3. Imposition of penalty under Rule 27 of the Central Excise Rules, 2002.
4. Appeal by the department for imposition of penalty under section 11A C.
5. Rejection of departmental appeal by the Commissioner (Appeals).
6. Tribunal's decision on the appeal seeking enhancement of penalty.

Analysis:
1. The original authority confirmed a demand of Rs.4,99,118/- along with interest and imposed a penalty of Rs.5,000/- under Rule 27 of the Central Excise Rules, 2002. The party filed an appeal against this order, which was disposed of by the Commissioner (Appeals) setting aside the duty demand and penalty. The department then appealed to the Tribunal, which dismissed the appeal against the order of the Commissioner (Appeals).

2. Subsequently, the department filed another appeal against the original authority's order, arguing that penalty should have been imposed under section 11A C instead of Rule 27. The Commissioner (Appeals) rejected this appeal, noting that the original authority's order had already been set aside and merged with the earlier order of the Commissioner (Appeals).

3. The Tribunal, in its analysis, observed that the original authority's order demanding duty and imposing a penalty of Rs.5,000/- had been completely set aside by the Commissioner (Appeals), and the department's appeal to the Tribunal had also been rejected. Therefore, the Tribunal concluded that there was no basis for entertaining an appeal against the Commissioner (Appeals)'s order rejecting the appeal seeking enhancement of the penalty imposed by the original authority.

4. Ultimately, the Tribunal disposed of the appeal in light of the above analysis, indicating that the appeal seeking enhancement of the penalty could not be entertained given the previous decisions and orders on the matter.