1995 (7) TMI 199 - AT - Central Excise

Summary

Issues:
- Appeal against reduction of penalty by Collector (Appeals) from Rs. 10,000 to Rs. 1,000.
- Consideration of gravity of the offence committed by the assessee.
- Assessment of mitigating circumstances by the Collector (Appeals).
- Justification of penalty reduction from Rs. 10,000 to Rs. 1,000.

Analysis:

The appeal before the Appellate Tribunal CEGAT, New Delhi was filed by the Collector, Central Excise, Chandigarh against the order of the Collector (Appeals) regarding the penalty imposed on the assessee. The main contention was that the penalty imposed was not commensurate with the offence committed by the assessee, who had manufactured and cleared P.C.C. Poles without obtaining a Central Excise license. The Asstt. Collector confirmed the demand and imposed a penalty of Rs. 10,000 on the assessee, which was later reduced to Rs. 1,000 by the Collector (Appeals).

During the proceedings, the learned JDR representing the appellant argued that the reduction in penalty was not justified considering the seriousness of the offence committed by the assessee. It was emphasized that the assessee had clandestinely removed goods without paying duty and without proper records, which warranted a higher penalty. The JDR urged the Tribunal to accept the appeal based on the gravity of the offence.

In the absence of representation from the respondents, the Tribunal proceeded to evaluate the case on its merits. The Tribunal considered the submissions made by the Collector (Appeals) who had reduced the penalty after taking into account various factors presented by the assessee. The Collector (Appeals) had acknowledged that the assessee operated in a remote village, was unaware of the duty levy, supplied goods to a state entity, and had no malicious intent. These factors led to the reduction of the penalty to Rs. 1,000.

Upon review of the evidence and arguments, the Tribunal noted that the appellant failed to rebut the observations and circumstances considered by the Collector (Appeals) in reducing the penalty. The Tribunal emphasized that while the penalty should align with the gravity of the offence, mitigating circumstances could influence the decision. It was observed that the reasons for the penalty reduction were clearly outlined in the Collector (Appeals) order, and as such, the Tribunal found no grounds to interfere with the decision.

Ultimately, the Tribunal upheld the Collector (Appeals) order, rejecting the appeal against the reduction of the penalty from Rs. 10,000 to Rs. 1,000. The judgment underscored the importance of considering all relevant circumstances and justifications when determining the appropriate penalty for excise duty violations.