2005 (10) TMI 19 - AT - Central Excise

Central Excise The penal action under Central Excise Act, and Rules cannot be invoked for evasion of duty imposed under Additional Excise Duty (Goods of Special Importance) Act. Interest Penalty

Summary

Issues:
1. Duty evasion and penalties imposed on the appellant company and individuals
2. Confiscation of plant and machinery
3. Interest demanded under Section 11AB
4. Applicability of Rule 209A regarding penalties

Analysis:
1. The case involved duty evasion by the appellant company, leading to penalties imposed by the Commissioner. The appellant admitted the evasion but cited extenuating circumstances, including the deposit of the confirmed duty and partial payment of penalties. The company's representatives cooperated with the investigation, leading to a plea for leniency. The Tribunal acknowledged the duty evasion but considered the deposited amount and reduced the penalty on the company to Rs. 12 lakhs under Rule 173Q of the Central Excise Rules.

2. The Commissioner had ordered the confiscation of plant and machinery, but the Tribunal found it unnecessary since the entire duty was already paid before the adjudication proceedings concluded. Therefore, the Tribunal set aside the confiscation order, considering the duty payment as a mitigating factor.

3. Regarding the interest demanded under Section 11AB, the Tribunal ruled that it was not tenable for the period in dispute. As a result, the demand for interest was deemed invalid, providing relief to the appellant company.

4. The case involved penalties imposed on the Director and Manager under Rule 209A, which was contested by the appellant. The Tribunal agreed that since no goods were confiscated, and there was no allegation of confiscatable goods, the penalties under Rule 209A were unwarranted. Consequently, the Tribunal allowed the appeals of the individuals on whom penalties were imposed under Rule 209A.

In conclusion, the Tribunal confirmed the duty demand, reduced the penalty on the appellant company, set aside the order of confiscation of plant and machinery, invalidated the interest demand under Section 11AB, and allowed the appeals of the individuals regarding penalties imposed under Rule 209A. The decision provided partial relief to the company and full relief to the individuals, considering various mitigating factors and legal provisions.