2019 (5) TMI 1765 - AT - Central Excise

Conclusion of proceedings - Seizure of goods - clandestine removal - pursuant to search and inquiry made at the premises of the appellant, the appellant accepted to pay the tax as calculated by Revenue alongwith interest and penalty in terms of Section 11AC (1)(d) of Central Excise Act - HELD THAT - The dispute with regard to seizure portion and alleged clandestine clearance stands settled on 23.08.2018, as intimated by Revenue, pursuant to payment of duty, interest and penalty, both for the alleged clearances and also for the goods found and seized. In this view of the matter the impugned order is non est in the eyes of law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether the payment of tax, interest, and penalty under Section 11AC (1)(d) of the Central Excise Act concludes all proceedings related to a search and inquiry at the appellant's premises?
2. Whether the impugned orders rendered in the case are nugatory?

Analysis:

Issue 1:
The primary issue in the appeals was whether, following a search and inquiry at the appellant's premises, the acceptance of paying tax as calculated by the Revenue, along with interest and penalty under Section 11AC (1)(d) of the Central Excise Act, should lead to the conclusion of all proceedings. The appellant, a manufacturer of kitchen accessories under the brand name "Homecare," was not registered with the Department nor paying Central Excise duty. Subsequent investigations revealed discrepancies in the activities of related companies, leading to the issuance of show cause notices and calculation of duty payable by the manufacturer. The appellant agreed to pay the calculated duty, interest, and penalty, which was acknowledged by Revenue, settling the demand under Section 11AC (1)(d).

Issue 2:
Further, the appellant challenged the impugned orders passed by the Commissioner (Appeals) upholding penalties imposed under Rule 25 and Rule 26, and a redemption fine related to the seizure of non-duty paid goods and alleged clandestine clearances. The appellant contended that since the disputes were settled by paying the duty, interest, and penalty as per the final settlement letter, the impugned orders should be considered non est / nugatory. The Revenue representative acknowledged the settlements made in the final settlement letter. The Tribunal, after considering the contentions, held that the disputes regarding the seizure portion and alleged clearances were settled as per the final settlement letter dated 23.08.2018. Consequently, the impugned orders were deemed non est in the eyes of the law, and the appeals were allowed, setting aside the impugned orders and entitling the appellant to consequential benefits.

In conclusion, the Tribunal's judgment clarified that the settlement of tax, interest, and penalty under Section 11AC (1)(d) of the Central Excise Act led to the conclusion of the proceedings related to the search and inquiry at the appellant's premises, rendering the impugned orders nugatory.