2019 (3) TMI 1488 - AT - Central Excise

Quantum of Penalty u/r 173Q of the Central Excise Rules, 1944 - manufacture and clearance of AC without payment of duty - Held that - The learned Commissioner (Appeals) has reduced penalty in proportionate to reduction of duty liability from ₹ 50,000/- to ₹ 25,000/-. The argument of the appellant that no penalty is imposable on them, is devoid of merit inasmuch as they have cleared the ACs in respective financial years after exceeding the prescribed limit and failed to discharge duty. This fact came to the knowledge of the department after visit to their unit. There are no valid reason to interfere with the impugned order - appeal dismissed.

Summary

Issues:
Appeal against duty demand, penalty, and confiscation of goods under Central Excise Rules, 1944.

Analysis:
The case involved an appeal against an order passed by the Commissioner of Central Excise (Appeals) regarding duty demand, penalty, and confiscation of goods related to the manufacturing and clearance of Air Conditioners without payment of duty during the period of 1984-85 and 1985-86. Initially, a show-cause notice was issued for recovery of duty amounting to ?1,92,249.75 and penalty, along with the proposed confiscation of three ACs valued at ?35,000. The duty demand was confirmed, a penalty of ?50,000 was imposed, and confiscation of goods was directed. The matter was remanded to the Tribunal for de novo adjudication, resulting in a reduction of duty to ?63,994 and confirmation of the penalty at ?50,000. Subsequently, the penalty was reduced to ?25,000 by the Commissioner (Appeals), leading to the current appeal.

The appellant contended that since there was no intention to evade duty, the penalty imposed under Rule 173Q of the Central Excise Rules, 1944 was unwarranted. The Revenue argued that this was the third round of litigation before the Tribunal, with previous remands focusing on the correct determination of assessable value for duty computation. The adjudicating authority recalculated the assessable value, reduced the duty liability to ?63,994, and confirmed the penalty and confiscation. The Commissioner (Appeals) further reduced the penalty to ?25,000 based on the reduced duty liability, which was deemed legally sound.

In the de novo proceeding, the adjudicating authority reanalyzed the evidence, recalculated the duty to ?63,994 from the initial amount of ?1,92,249.75, which was not contested by the appellant. The reduction in duty led to a proportional reduction in penalty from ?50,000 to ?25,000 by the Commissioner (Appeals). The Tribunal found the appellant's argument against the penalty imposition meritless as they had exceeded the prescribed limit, failed to discharge duty, and the department discovered the violation during a unit visit. Consequently, the Tribunal upheld the impugned order, dismissing the appeal.

In conclusion, the Tribunal found no valid reason to interfere with the order, affirming the duty demand, penalty imposition, and confiscation of goods under the Central Excise Rules, 1944.