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Issues:
1. Central Excise duty demand and Customs duty demand on imported raw material. 2. Penalty imposed under Section 11AC of Central Excise Act and Sections 112 and 114 of Customs Act. 3. Payment of duty, interest, and penalty within the specified time frame. 4. Penalty imposed on the partner. Analysis: 1. The case involved M/s. Akash Fabrics, a 100% EOU engaged in manufacturing various fabrics and yarn for captive consumption. A shortage of Polyester Texturised Yarn was found during a stock verification, leading to Central Excise duty demand of Rs. 1,32,356/- and Customs duty demand of Rs. 2,58,035/- on the imported raw material used. The partner admitted the shortage and non-payment of Central Excise duty on the removed goods. The impugned order confirmed the duty demands and imposed penalties under relevant sections. 2. The appellants, despite not appearing in person, submitted written arguments. They contended that once excise duty was demanded on finished goods, no duty on inputs could be levied. Citing relevant tribunal decisions, the judge found in favor of the appellants, setting aside the Customs duty demand and the corresponding penalties under Sections 112 and 114 of the Customs Act. 3. Regarding penalties, the appellants claimed to have paid the entire duty and 25% of the penalty within 30 days of the adjudication order. However, the judge noted that interest had not been paid, and the lower authorities did not specify the payment provisions. Referring to precedents, the appellants were given the option to pay interest within 30 days to fulfill the payment requirements. Failure to comply within the stipulated time would result in a penalty equivalent to the Central Excise duty under Section 11AC. 4. In consideration of the total duty demanded and penalties imposed on the firm and partner, the judge reduced the penalty on the partner from Rs. 50,000 to Rs. 10,000. The appeals were decided accordingly, with the pronouncement made on 10th November 2009.
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