2000 (1) TMI 436 - AT - Central Excise

Summary

Issues: Stay application under Section 35F of the Central Excise Act, 1944 for non-compliance with a previous stay order, imposition of penalty exceeding statutory limits, lack of proper consideration by authorities, failure to hear the appellant, and remand of the case to the Commissioner (Appeals) for further proceedings.

In this judgment, the appellant, represented by Shri P.R. Shah, challenged an order passed under Section 35F of the Central Excise Act, 1944 for non-compliance with a previous stay order requiring a deposit towards penalty. The appellant argued that the stay order did not address the facts of the case and was a non-speaking and superficial order. It was contended that the penalty imposed exceeded the statutory limit under Rule 14A of the Central Excise Rules, which allows a maximum penalty of Rs 2000. The appellant requested setting aside the order and remanding the matter for a review by the Commissioner (Appeals) as they had already deposited the duty amount and had a prima facie case on both facts and law.

The learned JDR, Shri K.M. Patwari, acknowledged the submissions made by the appellant upon reviewing the records. The Tribunal examined the stay order, impugned order of the Commissioner (Appeals), show cause notice, appeal memorandum, and relevant case laws. Referring to the decision in Bharat Woollen Mills v. CCE, Meerut, it was noted that the penalty imposed was not sustainable as the show cause notice did not propose penal action. The Tribunal observed that the impugned order lacked proper application of mind, as the appellant had already paid the duty before the show cause notice was issued. The penalty imposed exceeded the limit prescribed by Rule 14A, and there was a failure to appreciate the case by the authorities. Consequently, the Tribunal found merit in the appellant's contentions and granted an unconditional stay, remanding the appeals back to the Commissioner (Appeals) for a review on the merits of the case.

The Tribunal concluded that the Commissioner (Appeals) had not adequately addressed the merits of the case and, therefore, ordered the remand of both appeals. The stay application was allowed, and an unconditional stay was granted, with directions to the Commissioner (Appeals) to hear the appellant on the merits of the case and dispose of the appeals in accordance with the law.