2011 (10) TMI 390 - AT - Central Excise

Clandestine removal - Removal of goods without issue of sales bill - Excise officer relied on statement of Buyers - Adjudicating authority gave offer to pay duty based on cum duty price - Held That - Duty liability has been evaded further payment of cum duty price is justified. Penalty was reduced to 25%.

Summary

Issues:
Clandestine removal of excisable goods, benefit of cum-duty price, imposition of penalties under Section 11AC, remand of penalties on other parties/buyers.

Analysis:
The appeal involved a case where excisable goods were clandestinely removed without proper documentation. The main appellant was found liable for the evasion of duty amounting to Rs. 73,37,395. The Commissioner (Appeals) had set aside penalties imposed under Section 11AC and remanded the matter back to the adjudicating authority for reconsideration of penalties on other parties. The main issue in the appeal by the assessee (E/2629) was the extension of the benefit of 25% penalty payment based on cum-duty price, as per the decision in the case of M/s. Akash Fashion Prints Pvt. Limited. The Revenue's appeal (E/2544) challenged the remand of penalties on other parties and argued for the imposition of penalties under Section 11AC due to the failure to discharge duty liability promptly.

The Tribunal noted the undisputed fact of clandestine removal by the main appellant and agreed with the Commissioner (Appeals) that there was an evasion of duty. The Tribunal upheld the duty liability on the main appellant and granted the benefit of discharging duty based on cum-duty price. The Tribunal directed the appellant to pay 25% of the recalculated duty amount within 30 days. Regarding the Revenue's appeal, the Tribunal acknowledged the correctness of setting aside personal penalties by the Commissioner (Appeals) but found the remand to be incorrect due to limitations on the Commissioner's power to remand. The Tribunal emphasized the need for the adjudicating authority to decide on penalties for other parties following principles of natural justice.

In conclusion, the Tribunal disposed of the appeals by upholding duty liability, granting the benefit of Section 11AC for penalty payment, and remanding the issue of personal penalties on other parties to the adjudicating authority for proper consideration.