2013 (8) TMI 160 - AT - Central Excise

Removal of processed fabrics - Interest on unpaid duty - Held that - appellant is required to pay the interest on the amount of the duty liability which has been confirmed on them. To that extent, appellant s appeal for non-imposition of penalty is liable to be rejected and is rejected - Decided against assessee. Penalty u/s 11AC - Held that - Since the appellant has paid the amount of duty liability and is ready to pay the interest liability, therefore, appellant is liable for imposition of penalty under Section 11AC of the Central Excise Act, 1944, at the same time, he is liable to get the benefit of 25% of the amount of duty liability confirmed subject to the condition that he pays the amount of interest and the penalty within thirty days on receipt of this order - Following decision of COMMISSIONER OF CENTRAL EXCISE, AHMEDABAD Versus AKASH FASHION PRINTS PVT. LTD. 2009 (1) TMI 113 - GUJARAT HIGH COURT - Decided against assessee.

Summary

Issues:
- Confirmation of demand of duty liability
- Imposition of interest on confirmed duty liability
- Imposition of penalty under Section 11AC of the Central Excise Act, 1944
- Benefit of paying 25% of the duty liability as penalty

Confirmation of Demand of Duty Liability:
The appellant's factory was found to be engaged in clandestine removal of processed fabrics during a visit by department officers. Both the adjudicating authority and the first appellate authority confirmed the demands raised, interest, and imposed an equivalent penalty under Section 11AC of the Central Excise Act, 1944. The appellant did not contest the issue on merits, and the orders confirming the demands were upheld.

Imposition of Interest on Confirmed Duty Liability:
The appellant was directed to pay interest on the confirmed duty liability. The appeal for non-imposition of penalty was rejected, as the appellant's liability for interest payment was upheld.

Imposition of Penalty under Section 11AC:
The adjudicating authority and the first appellate authority did not extend the benefit of paying 25% of the duty confirmed as penalty, as provided under Section 11AC of the Central Excise Act, 1944. However, considering that the appellant had paid the duty liability and was willing to pay the interest, the Tribunal applied the judgment of the High Court of Gujarat in a similar case. The Tribunal held that the appellant was liable for the penalty under Section 11AC but was entitled to the benefit of paying 25% of the confirmed duty liability as penalty, provided the interest and penalty were paid within thirty days of receiving the order.

In conclusion, the appeal was disposed of with the appellant being liable for the penalty under Section 11AC but granted the benefit of paying a reduced penalty amount, subject to fulfilling the conditions set by the Tribunal.