2019 (3) TMI 664 - AT - Central Excise

Imposition of penalty - applicants submitted that considering the fact that acceptances of such an order of penalty would adversely affect their export credibility - Held that - Commissioner of CGST and Central Excise had confirmed duty demand of more than 14 crores alongwith interest and penalty against the original company M/s. HP International and imposed penalty on the individuals, including these three applicants vide his order dated 07.06.2018. It is stated that the said company had already preferred appeal in the CESTAT. This being so that could affect the credit reading as exporters, there is a justifiable ground to accept the appeal in which penalty of less than 2 lakhs of rupees is imposed. Appeals be admitted for hearing if cost is paid within 30 days hence.

Summary

Issues:
Delay in filing appeals before CESTAT due to penalty amount below prescribed limit.

Analysis:
The appellants, in this case, had meager penalties imposed on them, which they found challenging to appeal against due to the associated litigation expenses and the need for frequent travel to Mumbai where the CESTAT is located. The appellants' credibility in export activities was at risk due to accepting the penalties, prompting them to file appeals at a later stage. The appellants requested condonation of the delay ranging from 65 to 69 days to ensure justice. They filed affidavits supporting their contentions.

The Assistant Commissioner representing the respondent objected to the condonation of delay applications, citing that the applications did not specify the exact number of days requiring condonation for appeal admission. The AR highlighted that the delay was attributed to the appellants' failure to follow up with their advocate and left the decision to the court's discretion. Additionally, the penalty amounts were below the prescribed limit of ?2 lakhs, providing the right to appeal to the aggrieved party.

Upon considering the submissions, affidavits, and the case's factual background, it was observed that the Commissioner had confirmed duty demands exceeding 14 crores, along with interest and penalties against the original company. Penalties were also imposed on the individuals, including the three applicants. The company had already appealed in the CESTAT, potentially affecting the appellants' creditworthiness as exporters. Given the justifiable grounds and the penalties being below ?2 lakhs, the appeals were accepted. The appellants demonstrated sufficient reasons for condoning the delay and even offered to compensate the delay by paying costs to the respondent department. Consequently, the delay in filing the appeals was condoned upon each applicant paying a cost of ?2000 to the respondent department.

The final order pronounced allowed the COD applications, permitting the appeals to be admitted for hearing within 30 days if the costs were paid promptly.