2014 (2) TMI 692 - AT - Central Excise

Demand of differential Central Excise duty, interest thereof and imposition of penalty - Held that - appellant herein, on being pointed out by the Audit party, has paid the differential Central Excise duty worked out by the Audit party along with interest on 24.03.2010. It is also noticed from the records that the appellant has paid 25% of the amount of duty as penalty on 19.04.2010. In my view, having discharged the entire duty liability, interest thereof and 25% of the amount of duty as penalty, the issue should have been closed by the authorities as per the provisions of Section 11A (2B) of Central Excise Act, 1944. It is also noticed from the adjudication order that the adjudicating authority has, while adjudicating the issue, done the very same - Appellant, having discharged differential Central Excise duty, interest thereof and also 25% of the amount of duty liability, as pointed out by the Audit party, before the issuance of show cause notice, has to be construed as conclusion of the proceeding, if any, initiated against him - Decided in favour of assesssee.

Summary

Issues:
1. Discharge of differential Central Excise duty without accounting for lifts and parts in records.
2. Imposition of penalty and confirmation of demand by adjudicating authority.
3. Appeal against Order-in-Original before first appellate authority.
4. Lack of co-relation between commercial and Central Excise invoices.
5. Double payment of Excise duty for certain invoices.
6. Non-release of seized documents affecting the defense.
7. Purchase of bought out parts after goods removal from factory.
8. Payment of entire duty liability, interest, and penalty before show cause notice.

Analysis:
The case involves the appellant clearing lifts and parts without proper accounting, leading to a show cause notice for differential Central Excise duty, interest, and penalty. The adjudicating authority confirmed the demand and imposed penalties. The appellant's appeal before the first appellate authority was unsuccessful, challenging the lack of co-relation between invoices, double payment of duty, and non-release of seized documents affecting defense.

The appellant argued that the Additional Commissioner's order lacked co-relation between invoices and failed to acknowledge double payments. They contended that bought out parts were purchased after goods removal, not subject to duty. However, the Departmental Representative highlighted the appellant's prior payment of the entire duty amount, interest, and 25% penalty before the show cause notice.

Upon review, the judge noted the appellant's full payment of duty, interest, and 25% penalty before the notice, invoking Section 11A(2B) of the Central Excise Act. The judge observed that the issue should have been closed after full payment. The appellant's challenge to the remaining 75% penalty was deemed unnecessary as the authority had already imposed the 25% penalty as per Section 11AC.

Ultimately, the judge concluded that the appellant's actions of discharging the duty, interest, and 25% penalty before the notice should conclude the proceedings. The appeal was disposed of, directing lower authorities to consider the case concluded even before the show cause notice was issued.