2017 (12) TMI 1022 - AT - Central Excise

Quantification of duty - Department is aggrieved that Commissioner should have quantified net duty liability without delegating that to the Range Officer - Held that - the adjudicating authority may very well call for verification report in case it is necessary from a Range Officer etc. However arriving at the net duty liability or net differential duty liability is not only the prerogative of such adjudicating authority but it is also his responsibility - we remand the matter back to the adjudicating authority for the limited purpose of quantifying the demand in respect of the three assessees on the basis of the conclusions arrived at in the impugned order. Penalty u/s 11AC on Sai Poly - Held that - the adjudicating authority in de novo adjudication in respect of M/s.Sai Poly while indicating the quantum of penalty under Section 11AC however at the same time shall give the option of reduced penalty of 25% of the duty so determined of course subject to the conditions for availing such reduced penalty - appeal allowed in part. Penalty u/r 26 of CER 2002 on M/s.J.K. Fishnets and on Shri P.R. Sampath Kumar - Held that - these penalties are very much on the lower side and are not incommensurate with the acts and omissions of person concerned - penalties upheld. Appeal allowed in part.

Summary

Issues:
- Duty liability confirmation and quantification
- Imposition of penalties under Central Excise Act, 1944
- Dispute regarding penalty reduction option
- Delegation of quantification to Range Officer
- Appeal decisions on penalties imposed

Analysis:

The case involved duty evasion through discreet removal of polypropylene bags without payment of duty. The Commissioner, in the impugned order, confirmed duty demands for various entities and imposed penalties under the Central Excise Act, 1944. The appellants challenged the penalties and the non-extension of the option of reduced penalty under Section 11AC. The department appealed against the delegation of quantification to the Range Officer. The Tribunal found merit in the department's argument that quantification of duty liability should be done by the adjudicating authority and not delegated. As a result, the matter was remanded back to the adjudicating authority for quantifying the demand. The penalties imposed under Section 11AC were also reviewed, and the Tribunal directed the adjudicating authority to offer the option of reduced penalty to M/s.Sai Poly Industries. The penalties imposed under Rule 26 of CER 2002 on M/s.J.K. Fishnets and Shri P.R. Sampath Kumar were upheld as they were deemed appropriate considering the acts and omissions of the individuals. Consequently, the appeals were disposed of accordingly, with some being partly allowed and others dismissed.

This judgment primarily addressed the duty liability confirmation, imposition of penalties, dispute over penalty reduction options, and the delegation of quantification to the Range Officer. The Tribunal emphasized the responsibility of the adjudicating authority in quantifying duty liability and offering the option of reduced penalties. The penalties imposed were reviewed, with some being upheld and others dismissed based on the circumstances of the case. The decision highlighted the importance of proper quantification procedures and the need for penalties to be commensurate with the violations committed.