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Issues involved: Praying for waiver of pre-deposit of mandatory penalty and personal penalty imposed, destruction of Hydrochloric Acid without remission or payment of excise duty, applicability of penalty after payment, interpretation of relevant case law.
In the present case, the appellants and the Manager of the appellants company sought waiver of the pre-deposit of a mandatory penalty and personal penalty imposed on them. The allegation against the appellants was that they destroyed 30% of the Hydrochloric Acid without seeking remission or paying the excise duty. The appellants argued that they paid the duty immediately upon being informed by the departmental officer, rendering the penalty imposed post-payment as not maintainable. They cited the judgment in the case of Amritsar Crown Cap P. Ltd v. CCE to support their contention. Upon hearing the arguments from both sides, the Tribunal observed that the amount had been deposited even before the show cause notice was issued. Consequently, the appellants established a prima facie case in their favor for non-imposition of the mandatory penalty, leading to the allowance of the stay application. The issue being straightforward, both appeals were considered together for final disposal in accordance with the law. The appellants' counsel also presented a copy of the Final Order No. 381/2003, dated 22-5-2003, from their own case. This order set aside the imposition of the mandatory penalty based on a previous judgment by the Tribunal in the case of Dynamatic Technologies Ltd. v. CCE, Chennai. The appellants had voluntarily paid the duty to the Government even before the show cause notice was issued. As per established legal precedents, including judgments from the Tribunal and co-ordinate Benches, it was determined that the mandatory penalty under Section 11AC of the Central Excise Act, 1944, or under Rule 173Q of the Central Excise Rules, would not be leviable, including the interest under Section 11AB. Consequently, the impugned order was set aside, the appeals were allowed, and the stay applications were disposed of as per the orders.
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