2008 (11) TMI 260 - HC - Central Excise

Penalty and interest - Immunity/waiver - Held that - As no reason stated in the order as to why the request of the petitioners company for waiver of the penalty was rejected. Though it is now argued by the learned counsel for the respondents that the petitioners company is not entitled for waiver on the ground that full and true disclosure was not made by the petitioners and that the Company is not a Sick Industrial Company,no discussion anywhere in the order about this contention found. Therefore, in respect of penalty, for want of any discussion and for want of any specific finding, the matter requires re-consideration by the Commission. In respect of interest, the learned counsel appearing for the respondents has pointed out that in paragraph-15 of the order, there is a discussion as well as finding as to why the Commission has declined to waive the interest. The learned counsel for the petitioner is not in a position to point out any infirmity regarding the said conclusion so as to persuade this Court to interfere with the same. Therefore, the clause in respect of interest cannot be set aside, and the same needs to be confirmed. Appeal partly allowed.

Issues involved:
1. Challenge to the imposition of interest and penalty in the impugned order.

Detailed Analysis:
1. The petitioner challenged the imposition of interest and penalty in the impugned order under Section 32(K) of the Central Excise Act, arguing that the Commission should have considered the request for waiver of interest and penalty based on materials presented. The petitioner contended that despite providing evidence that the company was a Sick Industrial Company and justifying the waiver, the Commission imposed penalty and interest without proper consideration. The petitioner sought to set aside the clauses related to interest and penalty and remand the matter back to the Commission for fresh consideration in accordance with the law.

2. The respondents, in their counter, argued against interference with the impugned order, stating that the petitioner's company was not a Sick Industrial Company and had evaded excise duty, thus not qualifying for the waiver of interest and penalty. They contended that even if the company was considered a Sick Industrial Unit, the relevant provisions did not apply to penalty and interest under the Central Excise Act. The respondents also claimed that the company did not make a full and true disclosure, further justifying the imposition of penalty and interest.

3. The Court analyzed the Commission's order and found no reason provided for rejecting the petitioner's request for the waiver of penalty. It noted the absence of discussion or specific findings regarding the petitioner's cooperation with the Commission or the disclosure of duty liability, as required under Section 32(K) of the Act. The Court concluded that due to the lack of discussion and findings, the matter concerning penalty required reconsideration by the Commission. However, in the case of interest, the Court acknowledged the discussion and finding in the order, declining to waive the interest. As the petitioner failed to point out any infirmity in this conclusion, the Court upheld the decision on interest.

4. The Court partially allowed the Writ Petition by setting aside the part of the order imposing penalty and remitting it back to the Commission for reconsideration. The Commission was directed to review the petitioner's request afresh within three months. Regarding the interest ordered to be paid by the petitioners, the Court found no reason to interfere and confirmed the impugned order. The Writ Petitions were dismissed concerning interest, and no costs were awarded, leading to the closure of the connected miscellaneous petitions.

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