2013 (8) TMI 60 - AT - Central Excise

Waiver of pre-deposit of penalty Held that - Both the lower authorities have not recorded any reasoning for visiting the appellant with penalty under 173Q of the erstwhile Central Excise Rules, 1944. In fact, the said Rule specifically requires that assessee be put to notice under which sub clause the penalty is sought to be imposed. In the absence of any such findings, appellant has made out a prima facie case for the waiver of pre-deposit of the amount of penalty Decided in favor of Assessee.

Summary

Issues involved:
Stay petition for waiver of pre-deposit of penalty under Central Excise Rules, 1944.

In the judgment delivered by Mr. M.V. Ravindran at the Appellate Tribunal CESTAT AHMEDABAD, the issue at hand revolved around a stay petition for the waiver of pre-deposit of a penalty imposed under the Central Excise Rules, 1944. The appellant had filed the stay petition seeking relief from the penalty imposed by the adjudicating authority and upheld by the first appellate authority. It was noted that the appellant had reversed the amount of cenvat or modvat availed on imported goods for manufacturing goods exported under DEEC license, along with the interest liability. However, both lower authorities had imposed a penalty under 173Q of the Central Excise Rules, 1944 without providing a specific reasoning or notice to the assessee regarding the penalty clause. The absence of detailed findings regarding the imposition of the penalty led the tribunal to acknowledge that the appellant had established a prima facie case for the waiver of the pre-deposit of the penalty amount. Consequently, the tribunal allowed the application for the waiver of pre-deposit of the penalty and stayed the recovery until the appeal's final disposal. The judgment highlighted the necessity for proper reasoning and notice when imposing penalties under specific clauses of the Central Excise Rules, emphasizing the importance of due process in such matters.

In conclusion, the judgment by Mr. M.V. Ravindran at the Appellate Tribunal CESTAT AHMEDABAD addressed the issue of a stay petition for the waiver of pre-deposit of a penalty under the Central Excise Rules, 1944. The appellant had sought relief from a penalty imposed without detailed reasoning or notice under a specific clause of the rules. The tribunal, upon finding the absence of proper justification for the penalty imposition, allowed the waiver of pre-deposit and stayed the recovery of the penalty amount until the appeal's final disposal. The judgment underscored the significance of providing adequate reasoning and notice to the assessee when imposing penalties under the Central Excise Rules, ensuring fairness and adherence to due process in such proceedings.