2017 (10) TMI 698 - AT - Central Excise

Benefit of reduced penalty - Clandestine Removal - availment of irregular credit -payment of duty demand with interest has been done - Held that - The Hon ble Supreme Court in the case of CCE Vs. R.A. Shaikh Paper Mills Pvt. Ltd. 2016 (4) TMI 1076 - SUPREME COURT has observed that the adjudication order must mention about the availability of benefit of first and second proviso of reduced penalty. Admittedly, the appellant has not been given the benefit of reduced penalty - equal penalty imposed has to be reduced to 25% of the duty demand - appeal allowed. Personal penalty on Director, Manager etc - Held that - no reasons to interfere with the nominal penalty imposed against such persons - penalty upheld - appeal dismissed. Appeal allowed in part.

Summary

Issues:
1. Alleged clandestine removal of excisable goods
2. Irregular availment of credit
3. Clearance of scrap without payment of duty
4. Applicability of reduced penalty
5. Personal penalty imposed on individuals

Analysis:
The case involved the appellants engaged in manufacturing boiler components facing a demand for duty amounting to ?52,94,478 for various alleged violations. The Settlement Commission declined to settle the case, leading to adjudication where the Commissioner dropped the demand related to clandestine removal but confirmed irregularly availed credit and clearance of scrap without payment of duty, totaling ?17,79,570. The appeal primarily challenged the equal penalty imposed, seeking the benefit of reduced penalty of 25%.

During the hearing, the appellant's counsel argued for the reduced penalty, citing payment of duty demand and interest as sufficient compliance. Referring to a Supreme Court case, it was noted that the adjudication order should mention the availability of reduced penalty provisions. As the appellant was not granted this benefit, the Tribunal ordered the equal penalty to be reduced to 25% of the duty demand.

Additionally, appeals were filed against personal penalties imposed on specific individuals, including the Director and Managers. The Tribunal found no grounds to interfere with the nominal penalties imposed on these individuals, leading to the dismissal of their appeals. Consequently, the penalty was reduced to 25% of the duty demand for the main appellant, with the appeals of certain individuals being dismissed while the main appellant's appeal was partly allowed.

In conclusion, the Tribunal modified the impugned order by reducing the penalty to 25% of the duty demand and dismissing the appeals related to personal penalties imposed on specific individuals, ultimately providing partial relief to the main appellant.