2018 (1) TMI 690 - AT - Central Excise

Clandestine removal - penalty - Held that - when the matter came up before the Tribunal in the first round of litigation, the appellant s appeal was rejected on merits and penalty was reduced to ₹ 2,00,000/- - The said order of the Tribunal has admittedly not been challenged by the appellant before any Higher Appellate Forum and as such has attained finality - penalty upheld - appeal dismissed.

Summary

Issues:
1. Confirmation of demand of duty on allegations of clandestine removal.
2. Imposition of penalty under Central Excise Rule, 1944.
3. Challenge to penalty imposition in the present appeal.

Analysis:

Issue 1: Confirmation of demand of duty on allegations of clandestine removal
The impugned order confirmed a demand of duty amounting to &8377; 5,78,301.08/- based on findings of clandestine removal. The Commissioner's order in de novo proceedings upheld this demand, leading to the imposition of penalty under Rule 9 (2) and 52A read with Rule 173 of the Central Excise Rule, 1944.

Issue 2: Imposition of penalty under Central Excise Rule, 1944
During the initial proceedings, a penalty of &8377; 2 Lakhs was imposed on the appellant. Upon remand, the Commissioner enhanced the penalty to match the amount of duty evaded. The Tribunal in a previous order reduced the penalty to &8377; 2 Lakhs, citing precedents and principles that penalties cannot be enhanced in remand proceedings. In the present appeal, the challenge was directed solely at the imposition of the penalty of &8377; 2,00,000/-.

Issue 3: Challenge to penalty imposition in the present appeal
The Tribunal noted that in the previous round of litigation, the appellant's appeal was rejected on merits, and the penalty was reduced to &8377; 2,00,000/-. As the matter was remanded only for re-quantification of the demand and the appellant did not challenge the Tribunal's decision in any Higher Appellate Forum, the penalty amount of &8377; 2,00,000/- was upheld and deemed final. Consequently, the Tribunal found no grounds to interfere with the penalty amount, leading to the rejection of the appeal.

In conclusion, the judgment upheld the demand of duty based on allegations of clandestine removal and confirmed the imposition of a penalty under the Central Excise Rule, 1944. The Tribunal rejected the challenge to the penalty amount in the present appeal, citing the finality of its previous decision on the matter.