2023 (11) TMI 558 - AT - Central Excise

Quantum of penalty - it is claimed that penalty equivalent to the duty confirmed under Section 11AC of the Central Excise Act should be imposed - HELD THAT - The duty has been confirmed against appellant by invoking the proviso to Section 11A (1) of the Central Excise Act,1944 and respondent has been held liable for penalty under Section 11 AC for the duty confirmed at both the premises i.e the registered premises of M/s Harsh Trader, 165, Deep nagar, RDSO, Manak Nagar Lucknow and unregistered premises at Little Care Public School, Behind RDSO, Gurudwara, Surya Nagar, Lucknow. However while imposing the penalty under Section 11 AC penalty has been imposed only in respect of the duty confirmed at the registered premises of M/s Harsh Trader, 165, Deep nagar, RDSO, Manak Nagar Lucknow. It is a settled law that in a case where demand has been confirmed invoking extended period of limitation penalty equivalent to duty evaded needs to be imposed and there is no discretion to any authority as held by the Hon ble Supreme Court in the case of UNION OF INDIA VERSUS M/S RAJASTHAN SPINNING WEAVING MILLS AND COMMISSIONER OF CUSTOMS AND CENTRAL EXCISE VERSUS M/S. LANCO INDUSTRIES LTD. 2009 (5) TMI 15 - SUPREME COURT . The appeal of the Revenue is having merits and needs to be allowed - Appeal filed by the Revenue is allowed.

Summary

Issues Involved:
1. Imposition of Penalty Equivalent to Duty Confirmed under Section 11AC of the Central Excise Act.
2. Repeated Adjournments and Ex-Parte Hearing.

Summary:

1. Imposition of Penalty Equivalent to Duty Confirmed under Section 11AC of the Central Excise Act:
The Revenue filed an appeal seeking modification of the Order-In-Original No. 49/Commr./LKO/CX/2010-11 dated 31.12.2010, issued by the Commissioner, Central Excise & Service Tax, Lucknow. The appeal contended that the adjudicating authority failed to impose a penalty equivalent to the total duty confirmed, which was Rs.137.50 lakhs + Rs.275.00 lakhs, under Section 11AC of the Central Excise Act, 1944. The Tribunal noted that the duty had been confirmed by invoking the proviso to Section 11A (1) of the Central Excise Act, 1944, and the respondent was held liable for penalty under Section 11AC for the duty confirmed at both the registered and unregistered premises. However, the penalty was imposed only for the duty confirmed at the registered premises. The Tribunal, citing the Supreme Court's decision in Union of India V/s M/s Rajasthan Spinning & Weaving, emphasized that when the demand is confirmed by invoking the extended period of limitation, a penalty equivalent to the duty evaded must be imposed without any discretion. Consequently, the appeal filed by the Revenue was allowed, and the penalty was modified to include the total duty confirmed.

2. Repeated Adjournments and Ex-Parte Hearing:
The Tribunal observed that the respondent consistently evaded appearing before the adjudicating authority despite multiple notices and opportunities for personal hearings. The Tribunal referenced the Supreme Court's observations in Ishwarlal Mali Rathod and other cases, highlighting the misuse of adjournments and the detrimental impact on the justice delivery system. The Tribunal noted that repeated adjournments and dilatory tactics are an insult to justice and the concept of speedy disposal of cases. Given the respondent's failure to appear and the provisions of Rule 21 of the CESTAT Procedure Rules, 1982, the Tribunal proceeded to hear the appeal ex-parte. The Tribunal underscored the importance of timely justice and the need to avoid unnecessary adjournments to maintain the efficacy of the judicial process.

Conclusion:
The Tribunal allowed the Revenue's appeal, modifying the penalty to be equivalent to the total duty confirmed, and emphasized the need for timely justice by avoiding unnecessary adjournments.