1998 (10) TMI 239 - AT - Central Excise

Summary

Issues:
Stay applications arising from an impugned order regarding duty evasion, penalty imposition, and confiscation of goods and property.

Analysis:
The case involved 44 stay applications stemming from the detection of duty evasion by a company processing grey fabrics. The officers discovered unrecorded finished stock and seized relevant documents during a factory visit. Subsequent investigations revealed significant non-recording of processed fabrics, resulting in duty underpayment amounting to Rs. 40,26,799. The Commissioner issued a show-cause notice seeking duty recovery, confiscation of goods, and penalties on the company and individuals involved. The impugned order confirmed duty, confiscated goods and property, and imposed penalties under relevant legal provisions.

Regarding the penalty imposition, the applicants clarified that the contested duty had been paid before the show-cause notice issuance, withdrawing the prayer concerning duty. The advocate cited a previous tribunal order where penalty pre-deposit was waived for a similar case. He argued for a stay on the confiscation order to ensure normal business operations. The Revenue representative opposed a standard practice of penalty waiver, citing the mandatory penalty imposition under Section 11AC.

The tribunal analyzed the legal provisions, noting the mandatory penalty equal to the short levied duty under Section 11AC but also the authority to dispense with deposit under Section 35F. It emphasized that while the penalty ultimately equals the duty amount, the provisions of Section 35F apply for granting stays. Previous tribunal decisions supported full waiver of penalty pre-deposit when duty was voluntarily paid.

Considering the submissions and the deposited duty, the tribunal waived the pre-deposit requirement for penalty on all applicants. It ordered the confiscation to be held in abeyance with specific conditions, including a bank guarantee and a commitment not to dispose of any property during the appeal process. The applicants were directed to fulfill these requirements within a specified timeframe.

In conclusion, the tribunal granted the stay applications, waived the pre-deposit of penalties, and placed conditions on the confiscation order, ensuring the appeal process's fair progression.