1998 (3) TMI 316 - AT - Central Excise

Summary

Issues: Alleged duty evasion, applicability of penalty under Section 11AC, recovery of interest on duty evaded, liability under Rule 173Q.

In the present case, Central Excise Officers discovered clandestine manufacture and removal of M.S. rods without duty payment. The appellants admitted the duty liability and made payments. A show cause notice proposing penalty under Section 11AC and interest recovery was issued. The appellants argued that the provisions of Section 11AB and 11AC were not in force during the offense period and disclaimed responsibility for the previous management's actions.

The adjudicating authority imposed the penalty and ordered interest recovery, citing the provisions' enactment before the notice issuance. The appellant appealed, contending that Section 11AC cannot apply retrospectively, referencing a previous Tribunal ruling. They also claimed the investigating officers assured no further action upon payment, which was not honored. The consultant further disputed the duty calculation method and the Revenue's case reliability.

The Tribunal agreed that Section 11AC and 11AB cannot be applied retrospectively due to their substantive nature. Consequently, the imposed penalty and interest recovery were set aside. The liability under Rule 173Q was questioned, as the adjudicating authority did not address the management responsibility issue. The consultant's argument that surrendering the right to contest via a letter is invalid was upheld, emphasizing statutory rights cannot be waived in such a manner.

Ultimately, the Tribunal overturned the impugned order, granting relief to the appellant and dismissing the stay petition as the appeal was resolved.