2004 (1) TMI 82 - HC - Central Excise

Reference to High Court - imposition of penalty - demand for interest - HELD THAT - We find that Tribunal has in fact given a reason i.e., the disputed duty has been paid by the party even before the issue of show cause notice and this would show that there was no question of any fraud, misrepresentation or suppression of facts. In fact, the Tribunal in Rashtriya Ispat Nigam Ltd.'s 2002 (11) TMI 234 - CEGAT, BANGALORE , held that where assessee deposits the duty even prior to the issue of a show cause notice, penalty should not be imposed and interest should not be levied. The Supreme Court 2003 (5) TMI 509 - SC ORDER has rejected the appeal filed against the said order. Therefore we find that order of the Tribunal is a reasoned order though brief and no question of law arises in regard to the said order. Petition is therefore dismissed.

Summary

Issues Involved: The judgment involves the imposition of penalties and demand for interest under various provisions of the Central Excise Act, 1944 and Central Excise Rules, 1944.

Imposition of Penalties and Demand for Interest:
The respondent, a registered Small Scale unit, was found to have cleared goods exceeding the exemption limit, leading to a show cause notice demanding duty, interest, and penalties under different provisions. The respondent had already deposited the excise duty before the notice was issued. The Additional Commissioner confirmed the duty demanded and imposed penalties under Section 11AC of the Act, as well as under various rules of the Central Excise Rules, 1944. The Appellate Commissioner upheld the decision, leading to an appeal before the CEGAT. The Tribunal allowed the appeal based on the precedent set in a previous case, where penalty and interest were not imposed when duty was paid before the show cause notice. The Department filed a petition questioning the Tribunal's decision.

Department's Petition:
The Department filed a petition under Section 35H of the Act, seeking clarification on three questions of law. These questions pertained to the Tribunal vacating penalties imposed under different rules and sections, as well as the demand for interest. The Department argued that the Tribunal's decision was not justifiable and legal, especially in light of a pending appeal before the Supreme Court.

Court's Decision:
Regarding the third question raised by the Department, the Court noted that the appeal before the Supreme Court had been dismissed, rendering the question irrelevant. As for the first and second questions, the Court found that the Tribunal had provided a valid reason for its decision based on the payment of duty before the show cause notice, indicating no fraudulent intent. Citing a previous case and the Supreme Court's rejection of an appeal against it, the Court concluded that the Tribunal's decision was reasoned, and no legal question arose. Consequently, the petition was dismissed.