2014 (3) TMI 486 - AT - Central Excise

Waiver of pre-deposit - Penalties, under Rule 26 of the Central Excise Rules, 2002 - Held that - if duty, interest and 25% of duty as penalty has been paid within 30 days of the issuance of show-cause notice, the proceedings against all the co-noticees comes to an end. Therefore, imposing penalties on the appellant are not warranted. Accordingly, the impugned order is set aside quo imposing penalties on both the appellants - Decided in favour of assessee.

Summary

Issues: Penalties imposed under Rule 26 of Central Excise Rules, 2002 on the appellants challenged based on payment made by the main party within 30 days of show-cause notice issuance.

Issue 1: Penalties Imposed under Rule 26 of Central Excise Rules, 2002

The judgment addressed the penalties imposed on both the appellants under Rule 26 of the Central Excise Rules, 2002. The appellants contended that the main party had paid the duty, interest, and 25% of the duty as penalty within 30 days of the show-cause notice issuance. They argued that as per the proviso to Section 11A of the Central Excise Act, 1944, the proceedings against the show-cause notice should come to an end. The appellants relied on the decisions in Tikam P. Bhojwani vs. CCE Ahmedabad - 2011 (272) ELT 88 (Tri) and CCE Raipur vs. Gopal Prasad Sultania - 2013 (293) ELT 271 (Tri.-Del.) to support their contention. The tribunal examined the case laws cited by the appellants and found that if duty, interest, and 25% of the duty as penalty are paid within 30 days of the show-cause notice issuance, the proceedings against all co-noticees should end. Consequently, the tribunal set aside the penalties imposed on both the appellants, ruling in their favor and allowing the appeals.

Final Decision:

The tribunal, led by Mr. Ashok Jindal, allowed both appeals and set aside the penalties imposed on the appellants under Rule 26 of the Central Excise Rules, 2002. The tribunal found that the main party had paid the required amounts within the specified timeframe, leading to the conclusion that the penalties imposed on the appellants were not warranted. The stay applications were also disposed of in favor of the appellants. This comprehensive judgment provides clarity on the legal implications of timely payments in excise cases and highlights the importance of adherence to statutory provisions for the resolution of such matters.