1999 (9) TMI 638 - AT - Central Excise

Issues:
1. Non-payment of duty by the assessee.
2. Allegation of penalty under Rule 173Q of the Central Excise Rules, 1944.
3. Dismissal of appeal by the Commissioner of Central Excise (Appeals) due to non-deposit of penalty amount.
4. Submission regarding technical nature of defects listed in the show cause notice.
5. Interpretation of the judgment of the Allahabad High Court in a similar case.
6. Consideration of the methodology of payment of duty under Rules 9 and 49 of the Central Excise Rules.
7. Precedential value of observations made by the Hon'ble High Court in a criminal matter.
8. Establishment of clearance of consignments without payment of duty by the assessee.
9. Defence of fault on the clerk for non-maintenance of the RG-1 account.
10. Imposition of penalty for various contraventions committed by the assessee.
11. Reduction of penalty amount based on considerations for the appellant being a Technocrat and no previous contraventions by the same assessee.

Analysis:

The case involved an appeal regarding the non-payment of duty by the assessee on certain cleared goods, leading to the imposition of a penalty under Rule 173Q of the Central Excise Rules, 1944. The assessee had cleared goods without debiting the required registers, which was discovered during an audit by Central Excise Officers. The Assistant Commissioner imposed a penalty of Rs. 1,05,000 on the assessee, who then appealed to the Commissioner of Central Excise (Appeals) along with a stay application. However, the Commissioner directed the assessee to deposit the entire penalty amount as a pre-condition for hearing the appeal, which the assessee failed to comply with, resulting in the dismissal of the appeal.

The appellant argued that the defects listed in the show cause notice were of a technical nature and did not warrant such a high penalty. Citing a judgment of the Allahabad High Court, the appellant contended that non-debit in the PLA did not amount to duty evasion but was a technical violation. However, the Tribunal observed that the methodology of duty payment, as per Rules 9 and 49 of the Central Excise Rules, required specific entries to denote payment of duty, and failure to make these entries meant duty had not been paid.

The Tribunal emphasized that the observations of the Hon'ble High Court in a criminal matter should not be considered precedential for the case at hand. It was established that the assessee had cleared consignments without paying duty initially but rectified the situation by making suitable entries later. The defence of blaming a clerk for non-maintenance of the RG-1 account was not accepted, and the Tribunal concluded that the various contraventions committed by the assessee justified the imposition of a penalty.

However, considering factors such as the appellant being a Technocrat, operating in the small sector, and no prior contraventions by the same assessee, the Tribunal decided to reduce the penalty from Rs. 1.5 lakhs to Rs. 10,000. This reduction was based on the need for substantial consideration towards the appellants, leading to the dismissal of the appeal with the modified penalty amount.

← Previous Next →