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2023 (9) TMI 916 - AT - Central ExciseLevy of penalty under Rule 26 of the Central Excise Rules , 2002 - clandestine removal - evasion of duty - HELD THAT - It is found that whether the appellant have cleared the goods to M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad clandestinely or otherwise, It can be decided only after the adjudication of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd. and others. However, the said show cause notice is pending for adjudication. In these circumstances, deciding this appeal at this stage shall be premature as the entire case is based on clandestine removal of raw material of M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad by M/s Laxcon Steel Ltd. The matter involved penalty against the present appellant should be re-adjudicated only on the basis of the outcome of the show cause notice F. No. DGCI/AZU/36-228/2012-13-2829 dated 03.10.2012. Accordingly, the penalty against the appellant is set aside for time being and matter remanded to the Adjudicating Authority to decide this matter after the outcome of the show cause notice dated 03.10.2012 issued to M/s. Laxcon Steels Ltd. The appeal is allowed by way of remand to the Adjudicating Authority.
Issues:
The case involved the imposition of a penalty under Rule 26 of the Central Excise Rules, 2002 on the appellant for allegedly facilitating another company in evading Central Excise duty through clandestine removal of goods. Summary: The appellant was penalized for allegedly aiding M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad in evading Central Excise duty by clandestinely removing goods. The appellant, a director of M/s. Laxcon Steels Ltd., challenged the penalty, arguing that his company's name appearing in the investigation diary against M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad was not sufficient grounds for imposition. The appellant contended that since the case of clandestine removal was against M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad, he had no involvement in their duty evasion. The Tribunal found that the penalty was premature as another show cause notice against M/s. Laxcon Steels Ltd. was pending adjudication for similar charges. Therefore, the penalty against the appellant was set aside, and the matter was remanded for further adjudication based on the outcome of the pending show cause notice. The appellant's argument was supported by legal precedents such as Manmeet Ispat Private Ltd. Vs. Commissioner of C. Ex. Cus. & S.T., Raipur and Commissioner of C.Ex. & S.T. Raipur Vs. P.D. Industries Pvt. Ltd. The Tribunal considered both parties' submissions and concluded that the penalty against the appellant should be re-examined only after the adjudication of the pending show cause notice against M/s. Laxcon Steels Ltd. The appeal was allowed, and the matter was remanded to the Adjudicating Authority for further consideration. The Tribunal's decision was based on the need to await the outcome of the pending show cause notice against M/s. Laxcon Steels Ltd. before determining the appellant's liability for the alleged facilitation of duty evasion by M/s Paras Bhavani Steel Pvt. Ltd., Ahmedabad. The penalty imposed on the appellant was set aside, and the case was remanded for re-adjudication in light of the pending proceedings against M/s. Laxcon Steels Ltd.
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