2018 (2) TMI 901 - AT - Central Excise

Clandestine removal - benefit of reduced penalty - Held that - admittedly the appellant deposited the interest within a period of 30 days along with deposit of penalty of 25%, within the said period, in terms of the Tribunal s order - Deposit under a wrong head also goes to the Revenue only and as such it cannot be concluded that the appellant had not deposited the said interest. The penalty was directed to be reduced to 25% - appellant would be entitled to the refund of pre-deposit of ₹ 4 lakhs made by them in terms of the said order of the Tribunal - appeal allowed.

Summary

Issues:
1. Allegation of clandestine removal against the appellant.
2. Reduction of penalty if interest and 25% penalty deposited within 30 days.
3. Claim for refund of pre-deposit amount.
4. Dispute over the proper implementation of the Tribunal's order regarding penalty reduction.

Analysis:
1. The proceedings were initiated against the appellant for clandestine removal, which they accepted. Tribunal's Order No.A/309-310/11/SMB/C-IV stated that if the appellant deposited interest and 25% of penalty within 30 days, the penalty would be reduced to 25%.

2. The appellant complied with the order by depositing interest and 25% penalty. Additionally, they had pre-deposited an amount during the appeal. The appellant sought a refund based on the Tribunal's order.

3. Lower authorities contended that the interest deposit was under the wrong accounting head, leading to a dispute over proper implementation of the Tribunal's order. They upheld a decision for the appellant to pay 100% penalty, which led to the present appeal.

4. The appellant clarified they were only seeking a refund of the pre-deposit amount and not disputing the computation error. The appellant argued that the interest was deposited, albeit under the wrong head, and the denial of the reduced penalty was unjustified.

5. The Tribunal found that the appellant had indeed deposited interest and 25% penalty within the stipulated period, as per the order. The deposit under the wrong head did not negate the compliance, and the appellant should be considered to have fulfilled the requirements for penalty reduction.

6. Therefore, the Tribunal extended the benefit of the order to the appellant, allowing them the refund of the pre-deposit amount. The decision set aside the lower authority's ruling and concluded in favor of the appellant.