2017 (3) TMI 605 - AT - Central Excise

Waiver of interest and penalty - seeking of waiver on the ground that duty was paid prior to issuance of SCN - Held that - reliance was placed in the decision of Hon ble Supreme Court decision in case of Union Of India Versus Dharamendra Textile Processors 2008 (9) TMI 52 - SUPREME COURT where it was held that penalty and interest under Section 11AC and 11AB respectively cannot be waived only because duty was paid before issuance of show cause notice - Since the goods were cleared clandestinely the confiscation of the goods and vehicle is also in accordance with law, waiver cannot be granted - appeal dismissed - decided against appellant.

Summary

Issues:
- Proper procedure for removal and duty payment on excisable goods
- Confiscation of goods and vehicle
- Imposition of penalty and interest

Proper Procedure for Removal and Duty Payment on Excisable Goods:
The appellant, engaged in manufacturing pastries and cakes, was found to have cleared goods without proper transport documents and payment of Central Excise duty. This led to the seizure of vehicles and goods valued at ?17,555. Further investigations revealed a total duty liability of ?2,28,609, which the appellant paid later. The Addl. Commissioner confirmed the demand with interest, confiscation of goods/vehicle, and imposed a penalty. The Commissioner(Appeals) allowed the appeal, but the CESTAT set aside the decision and remanded the matter. Upon fresh adjudication, the Addl. Commissioner confirmed the demand, interest, penalty, and confiscation, allowing redemption on payment of fines. The appellant contended that duty was paid before the show cause notice, seeking waiver of interest and penalty. However, the Tribunal held that penalty and interest cannot be waived solely based on pre-payment of duty, citing relevant legal precedents. Consequently, the Commissioner(Appeals) order was deemed correct and legal, leading to the dismissal of the appeal.

Confiscation of Goods and Vehicle:
The confiscation of goods and vehicles was based on the belief that they were liable for confiscation due to improper clearance and non-payment of duty. The seized items were released provisionally upon furnishing a bond and bank guarantee. Subsequent investigations revealed procedural irregularities in duty payment, leading to the confiscation order by the Addl. Commissioner. The Tribunal upheld the confiscation, stating that it was in accordance with the law, as the goods were cleared clandestinely. Therefore, the confiscation of goods and vehicles was deemed legal and correct, further supporting the dismissal of the appeal.

Imposition of Penalty and Interest:
The appellant argued for the waiver of penalty and interest, citing the pre-payment of duty before the issuance of the show cause notice. However, the Tribunal referred to legal decisions that established penalty and interest under specific sections cannot be waived solely based on pre-payment of duty. The Tribunal upheld the imposition of penalty and interest, emphasizing that the duty payment timing does not absolve the appellant from these obligations. Consequently, the order of the Commissioner(Appeals) was upheld, and the appeal was dismissed.