2017 (11) TMI 1567 - AT - Central Excise

Penalty - clandestine removal - Demand under Rule 8(3A) - Held that - very same issue decided in the case of M/s. Varadhalakshmi Mills Ltd. And M/s. Sona Rajendra Spinners (P) Ltd. Versus CCE, Madurai And CCE & ST, Salem 2016 (4) TMI 15 - CESTAT CHENNAI , where it was held that demand of duty under Rule 8(3A) is unsustainable as the said Rule has been struck down by the Hon ble High Court and the demand of duty and penalty imposed in the impugned orders is liable to be set aside - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of penalty under Rule 25 of Central Excise Rules, 2001/2002, Rule 173Q of erstwhile Central Excise Rules, 1944 r/w section 11AC and 38A of Central Excise Act, 1944.
2. Justification of penalty imposition based on previous orders.
3. Appeal against penalty imposition.

Analysis:
The case involved the imposition of a penalty on the appellants for clearing excisable goods without payment of duty and proper invoices during a specific period. The original authority imposed a penalty of &8377; 7,38,715/- on the appellants, equivalent to the total duty not paid in respect of goods cleared under 15 invoices. The Commissioner (Appeals) upheld this penalty in an order dated 28.10.2008. The appellants appealed against this decision.

During the hearing, the appellant's counsel argued that the issue of duty liability in relation to the 15 invoices was previously addressed in a different proceeding that resulted in a reduction of penalty to &8377; 1,00,000/-. The Tribunal had also set aside the demand of duty and penalty imposed in a Final Order dated 22.9.2015. The appellant contended that based on these previous decisions, the imposition of the penalty in the current case was unjustified.

The Assistant Commissioner representing the respondent supported the impugned order upholding the penalty imposition. After hearing both sides and reviewing the case records, the Tribunal found that the issue of duty liability for the same invoices had already been addressed in a previous Final Order dated 22.9.2015. Consequently, the Tribunal concluded that the imposition of the penalty in the present appeal was unwarranted. Therefore, the Tribunal set aside the penalty of &8377; 7,38,715/- imposed on the appellants.

In the final decision, the Tribunal allowed the appeal, specifically stating that the imposition of the penalty was unwarranted based on the previous order's findings. The Tribunal's ruling emphasized the importance of consistency in decisions and the relevance of previous judgments in similar matters.