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2001 (11) TMI 162 - AT - Central Excise
Issues involved: Appeal against order-in-appeal dated 10-5-2001 passed by the Commissioner of Central Excise (Appeals), New Delhi regarding imposition of penalty under Rule 173Q of the Central Excise Rules read with Section 11AC of the Act.
Summary: Manufacture and Clearance of Goods: The appellants, engaged in the manufacture of Patent and Proprietary Medicines and Medicaments, were found to have bifurcated sales to remain within the exemption limit by floating another firm, M/s. Agarwal Chemical Industries. They were also discovered to have manufactured and cleared goods under a different brand name without maintaining proper accounts. The Deputy Commissioner confirmed a demand of Rs. 88,23,209/- along with interest under Section 11AB of the Act and imposed penalties under Rule 173Q and Rule 209A on the appellants and their partners. The Commissioner (Appeals) set aside the penalties on the partners but maintained the order against the appellants' firm. Contestation of Penalty Imposition: The duty liability was not challenged, but the correctness of the penalty imposition under Rule 173Q of the Central Excise Rules read with Section 11AC of the Act was contested. The appellants relied on the case of M/s. Punjab Recorder Ltd. v. CCE, Chandigarh for their argument. Decision on Penalty Imposition: After hearing both sides and considering the case law cited, the Tribunal found that the imposition of penalty of Rs. 11,00,000/- under Rule 173Q of the Rule read with Section 11AC of the Act was unsustainable due to lack of apportionment. The Tribunal upheld the liability to pay interest under Section 11AB on the duty amount but set aside the penalty imposition due to the lack of apportionment. Final Decision: The impugned order of the Commissioner (Appeals) regarding the liability of the appellants for payment of duty and interest was upheld, except for the modification in the penalty imposition, which was set aside. The appeal of the appellants was disposed of accordingly.
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