2004 (9) TMI 243 - AT - Central Excise

Summary

Issues:
- Confirmation of central excise duty demand
- Imposition of penalties under Rule 173Q(1) on the company and Rule 209A on the director

Central Excise Duty Demand:
The case involved the confirmation of a central excise duty demand by the Commissioner (Appeals) in relation to unaccounted fabrics found in the factory premises of the appellant. Goods were seized and provisionally released upon execution of a bond. The appellant had paid central excise duty on the seized goods, which were found to have been removed without payment of duty. The director of the company admitted that goods were cleared without formalities due to the absence of the excise clerk and urgency in delivering finished goods to customers.

Imposition of Penalties:
The main contention was the imposition of penalties under Rule 173Q(1) on the appellant-company and Rule 209A on the director. The advocate cited precedents where penalties under Section 11AC could not be imposed if duty was paid before the issue of a show cause notice. However, the Commissioner imposed penalties under different rules. The Tribunal found a clear contravention of rules with an intent to evade duty payment, justifying the penalties. Although duty was paid before the show cause notice, penalties were reduced to Rs. 15,000/- on the company and Rs. 10,000/- on the director.

In conclusion, the appeals were partly allowed, with the penalties reduced considering the payment of duty before the issuance of a show cause notice. The judgment emphasized the imposition of penalties under the relevant rules based on the contravention of excise duty regulations and the awareness of the involved parties regarding the removal of goods without payment.