2017 (5) TMI 647 - AT - Central Excise

Penalty u/r 25 of the CER, 2002 - Clandestine removal - Held that - the duty amount was deposited even before issuing the SCN. When it is so, the impugned order modified and penalty reduced to 25% of the duty amount as per provisions of Section 11AC of the CEA, 1944. The assessee will get the partial relief. Redemption fine - the depreciation has occurred so the value has gone down, being the old goods, request made for reduction of quantum of redemption fine - Held that - we modify the impugned order and reduced the redemption fine to ₹ 15 lakhs only. The appellant will get the partial relief. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
1. Duty payment and penalty imposition under Rule 25 of the Central Excise Rules, 2002.
2. Reduction of redemption fine imposed on seized goods.

Analysis:

Issue 1: Duty payment and penalty imposition under Rule 25 of the Central Excise Rules, 2002
The appellant, engaged in manufacturing electronic goods, was found to have removed goods clandestinely without registering with the Central Excise department or paying duty. A duty demand of &8377;34,75,242/- was made along with penalties. The appellant agreed to pay the duty and cess, but contested the penalty amount. The appellant argued that since the duty was paid before the Show Cause Notice was issued voluntarily, the penalty should be reduced to 25% as per Section 11AC of the Central Excise Act, 1944. The Tribunal acknowledged the early payment of duty and modified the penalty to 25% of the duty amount, providing partial relief to the appellant.

Issue 2: Reduction of redemption fine imposed on seized goods
The appellant also contested the redemption fine imposed on the seized goods, arguing that the value of the goods had depreciated while in custody, warranting a reduction or waiver of the fine. The Commissioner (Appeals) had reduced the fine from &8377;20 lakhs to &8377;19 lakhs, but the appellant sought further reduction. The Tribunal considered the depreciation of the goods and reduced the redemption fine to &8377;15 lakhs, granting partial relief to the appellant. The goods remained in the custody of the department, and the Tribunal adjusted the fine accordingly.

In conclusion, the Tribunal partly allowed the appeal filed by the appellant, modifying the penalty and reducing the redemption fine, providing partial relief in both aspects.