2016 (11) TMI 427 - AT - Central Excise

Clandestine removal of goods - imposition of penalties on M/s. Skywin Match Industries - Held that - the appellant has settled the issue by paying the entire amount of duty liability along with interest, redemption fine and 25% of the penalty imposed by the adjudicating authority. Since the appellant is not contesting the duty liability and has paid the entire demand alongwith interest and has also paid 25% of the penalty within 30 days from the passing of the O-in-O, which is in line with the provisions of sec 11 AC, the appeal is allowed in the above terms. Imposition of penalties on M/s. Nancy Traders, whose proprietor Shri A. Kathiresan happens to be the managing partner of the appellant M/s. Skywin Match Industries - Held that - there is no finding to the effect that Nancy Traders had, dealt with any excisable goods which he knows or has reason to believe are liable for confiscation under the Act or the Rules. In view of the above discussions in the foregoing paras, I set aside the penalty imposed on the second appellant M/s. Nancy Traders. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Alleged clandestine removal of unaccounted stock by two appellants.
2. Confiscation of seized goods and imposition of penalties under the Central Excise Act, 1944.
3. Payment of duty, interest, redemption fine, and penalties by the appellants.
4. Appeal against the order-in-appeal confirming the demands and penalties.

Analysis:
1. The case involved two appellants, one engaged in manufacturing safety matches and the other in trading them. The appellants were accused of clandestine removal of unaccounted stock, leading to the confiscation of goods and imposition of penalties under the Central Excise Act, 1944.

2. The adjudicating authority confirmed the demand for duty, interest, and penalties, which was upheld by the Commissioner(Appeals). The appellants argued that the allegations were based on presumption and lacked corroborative evidence. However, they paid the demanded amounts as a gesture of cooperation.

3. The Judicial Member noted that the manufacturing appellant had settled the issue by paying the entire duty liability, interest, redemption fine, and 25% of the penalty. As the appellant did not contest the duty liability and complied with the provisions of Section 11 AC, the appeal was allowed.

4. Regarding the trading appellant, it was argued that there was no evidence of knowingly dealing with goods liable for confiscation. The Judicial Member set aside the penalty imposed on the trading appellant based on the lack of findings supporting the allegations.

5. The judgment allowed the appeal of the manufacturing appellant concerning penalties imposed under Section 11 AC and granted consequential benefits to the trading appellant. The decision was pronounced in open court on 12-04-2016.