2012 (6) TMI 101 - AT - Central Excise

Separate penalty imposed on goods confiscated on which duty and penalty has already been deposited under another order passed by Settlement Commission - Held that - It is strange that confiscation and penalty in respect of the impugned goods have been covered by a separate SCN and separate order, whereas the duty on the very same goods has been demanded under another SCN which covers clandestine clearances made earlier. Nevertheless, since the Settlement Commission has imposed a consolidated penalty in respect of the past clearances as well as the impugned consignment after taking note of the fact that the appellants have admitted their duty liability, a separate penalty cannot be sustained. Accordingly, while upholding the confiscation and imposition of redemption fine, penalty separately imposed under the impugned order is set aside.

Summary

Issues: Confiscation of goods, redemption fine, penalty imposition, Settlement Commission's order

Confiscation of Goods:
The impugned order confiscated the goods and imposed a redemption fine, which had already been paid by the appellants. The consultant for the appellants clarified that they do not contest the redemption fine. However, there was a penalty of Rs.74,254/- imposed under the impugned order. The duty amount for the impugned consignment was included in another show cause notice (SCN) dated 2.11.2010, and the matter was settled by the Settlement Commission's order dated 18.5.2012, imposing a penalty of Rs.1,50,000/- for other clearances and the goods subject to confiscation in the impugned order. The consultant argued that there was no ground for sustaining a separate penalty under the impugned order and requested its setting aside.

Redemption Fine and Penalty Imposition:
The consultant for the appellants stated that the impugned order imposed a redemption fine that had already been paid by the appellants, and they did not wish to contest it. Additionally, a penalty of Rs.74,254/- was imposed under the impugned order. The duty amount for the impugned consignment was part of another SCN dated 2.11.2010, and the matter was resolved by the Settlement Commission's order dated 18.5.2012, which imposed a penalty of Rs.1,50,000/- for previous clearances and the goods under confiscation in the impugned order. The consultant argued that a separate penalty under the impugned order was unjustified, considering the penalty already determined by the Settlement Commission. The consultant requested the setting aside of the penalty separately imposed under the impugned order.

Settlement Commission's Order:
The Settlement Commission's order, dated 18.5.2012, imposed a consolidated penalty for past clearances and the impugned consignment after the appellants admitted their duty liability. The appellate tribunal noted that the Settlement Commission's order was not available before the lower appellate authority during the initial proceedings since the appellants had not approached the Settlement Commission at that time. The tribunal found it peculiar that confiscation and penalty for the impugned goods were addressed separately from the duty demanded under another SCN covering previous clandestine clearances. Despite this, the tribunal held that a separate penalty under the impugned order could not be sustained, given the penalty already imposed by the Settlement Commission. Consequently, the tribunal upheld the confiscation and redemption fine while setting aside the separately imposed penalty under the impugned order, partially allowing the appeal.

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