2013 (11) TMI 1152 - AT - Central Excise

Clandestine Removal of goods - Rule 95A of the erstwhile Central Excise Rules, 1944 Waiver of Pre-deposit Penalty under Rule 25 of Central Excise Rule,2002 r.w. Section 11AC of the Central Excise Act,1944 - Held that - The appellant removed the goods clandestinely and there was excess stock of over and above the statutory records - These facts are not seriously disputed by the appellant at any point of time - The clandestine removal of biris based on private records was recovered by the officers there is no reason to interfere with the order passed by the Commissioner (Appeals) - the appellant had deposited the entire amount of duty - 25% of duty towards penalty under Section 11AC of the Act to be deposited as pre-deposit upon such submission rest of the duty to be waived till the disposal Partial stay granted.

Issues:
1. Duty evasion through clandestine removal of goods.
2. Imposition of penalty under Section 11AC of the Central Excise Act, 1944.
3. Applicability of exemption for clearance of unbranded biris.
4. Confiscation of seized goods and penalty under Rule 25 of the Central Excise Rules, 2002.

Issue 1: Duty evasion through clandestine removal of goods
The case involved the appellant obtaining registration certificates to manufacture and clear unbranded biris without duty payment. During a visit by Central Excise officers, excess stock of unbranded biris and tobacco was found above statutory records. It was revealed that 63,78,675 biris were cleared illicitly without paying central excise duty. The original authority confirmed a duty demand and imposed penalties under Section 11AC of the Central Excise Act, 1944. The Tribunal noted the appellant's clandestine removal of goods and excess stock, which were not disputed. The order by the Commissioner (Appeals) was upheld based on these findings.

Issue 2: Imposition of penalty under Section 11AC
The appellant had deposited the entire duty amount, leading to a request for a reduced penalty of 25% under Section 11AC of the Act. The Tribunal considered this submission and decided to uphold the impugned order. It allowed the option for the appellants to pay 25% of the duty amount as penalty if done within one month from the date of receiving the order. This decision was made after hearing both sides and examining the records.

Issue 3: Applicability of exemption for clearance of unbranded biris
The appellant claimed eligibility for an exemption up to the clearance of 20 lakhs unbranded biris under a specific notification. The learned counsel argued for this benefit, while the AR reiterated the findings of the Commissioner (Appeals). However, the Tribunal did not find grounds to interfere with the order passed by the Commissioner (Appeals) based on the facts of clandestine removal and excess stock.

Issue 4: Confiscation of seized goods and penalty under Rule 25
The original authority had imposed a penalty under Rule 25 of the Central Excise Rules, 2002, which was later set aside by the Commissioner (Appeals). The Tribunal did not address this issue specifically in its judgment, as the focus was primarily on the duty evasion, penalty under Section 11AC, and the exemption claim for unbranded biris.

In conclusion, the Tribunal upheld the order passed by the Commissioner (Appeals) regarding duty evasion and penalty imposition under Section 11AC. The appellant was granted the option to pay a reduced penalty amount if done within a specified timeframe. The judgment did not delve into the issue of confiscation of seized goods and penalty under Rule 25, as the primary focus was on the duty evasion and related penalties.

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