2009 (7) TMI 1018 - AT - Central Excise

Summary

Issues:
Initiation of proceedings for duty demand on clandestine removal of Polyester Crimped Yarn, imposition of penalty by the Original Adjudicating Authority, enhancement of penalty by Commissioner (Appeals) in line with Section 11AC, appellant's deposit of penalty amount, interpretation of Proviso to Section 11AC.

Analysis:

The judgment by the Appellate Tribunal CESTAT AHMEDABAD involved proceedings against the appellant for the confirmation of duty demand amounting to Rs. 94,516 due to alleged clandestine removal of Polyester Crimped Yarn. The Original Adjudicating Authority confirmed the duty demand but refrained from imposing any penalty since the entire duty was paid before the show cause notice was issued.

The Revenue, dissatisfied with the lack of penalty, appealed to the Commissioner (Appeals) who, considering the Supreme Court's decision in Union of India v. Dharamendra Textile Processors, enhanced the penalty to match the confirmed duty amount under the provisions of Section 11AC. This decision was further challenged before the Tribunal.

During the proceedings, the appellant had already paid 25% of the penalty amount within 30 days of the Commissioner (Appeals) order. The appellant's representative argued that the remaining penalty should be set aside as per the Proviso to Section 11AC.

The Tribunal noted that the Original Adjudicating Authority had not initially imposed any penalty, making the question of the appellant depositing 25% of the penalty irrelevant. However, as the penalty was increased by the Commissioner (Appeals) and 25% of the increased penalty was paid within the stipulated 30 days, the appellant was entitled to the benefit of the first Proviso to Section 11AC. Consequently, the Tribunal set aside the balance amount of penalty, confirming the penalty to the extent of the 25% already paid. The appeal was disposed of accordingly.

The judgment was pronounced in court on 14-9-2009 by Ms. Archana Wadhwa, J.