2018 (7) TMI 407 - AT - Central Excise

Penalty u/s 11AC and u/r 173Q of CER - non-payment of duty - intent to evade not present - Interpretation of Statute - N/N. 67/95 - Held that - The contention of the Learned Counsel that the Adjudicating authority had not given any finding in respect of imposition of penalty cannot be sustained. In any event, the appellant had disputed the fact of clearance of the goods without payment of duty in respect of 445.370 M.T. as alleged in the Show Cause Notice. So, the imposition of penalty is warranted. The appellant had already paid 25% of duty as penalty. The goods are cleared without payment of duty, the imposition of penalty under Section 11AC is justified - The imposition of penalty under Rule 173Q is not proper. Appeal allowed in part.

Summary

Issues:
Imposition of penalty under Section 11AC of the Central Excise Act, 1944 and Rule 173Q of the erstwhile Central Excise Rules 1944.

Analysis:
The case involved the appellant, engaged in manufacturing Iron and Steel items, facing a Show Cause Notice proposing a duty demand. The Commissioner confirmed a duty demand on certain MT, remanded part of the matter for verification, and set aside redemption fine and penalty. In a Denovo Adjudication, the Commissioner confirmed a duty demand on certain MT, dropped another demand, and imposed penalties under Rule 173Q and Section 11AC. The appellant appealed against the penalties.

The appellant's counsel argued against the imposition of penalties, stating no intention to evade duty and lack of findings on intent by the Adjudicating authority. The counsel also raised issues regarding the interpretation of law for exemption benefits and the imposition of penalties without proper findings. The Tribunal noted the appellant's payment of a portion of the duty as penalty, disputed clearances without duty payment for certain MT, and the Adjudicating authority's observations on penalty imposition.

The Tribunal found that the Adjudicating authority did address the penalty imposition issue, and since the appellant disputed only part of the duty demand, penalty imposition was justified. The Tribunal upheld the penalty under Section 11AC but set aside the penalty under Rule 173Q. The Tribunal considered the appellant's payment of penalties and cited case laws that were deemed inapplicable to the present case due to the clearance of goods without duty payment.

In conclusion, the Tribunal modified the order by setting aside the penalty under Rule 173Q while upholding the duty demand and penalty under Section 11AC. The appeal by the appellant was disposed of accordingly.

This judgment highlights the importance of findings on intent in penalty imposition cases, the significance of disputing duty demands, and the applicability of penalties based on clearances without duty payment under relevant legal provisions.