2012 (8) TMI 172 - AT - Central Excise

Clandestine removal of the goods - appellant firm who had removed the goods clandestinely, discharged the duty liability, interest and penalty to the extent of 25% of the duty involved Held that - Requirement of pre-deposit is waived and the appeal taken up for final disposal. Section 11A (1A) of Central Excise Act, 1944, if such person (the person liable to pay duty) has paid duty in full together with interest and penalty under sub-section (1A), the proceedings in respect of such person and the other persons to whom the notices are served under sub-section 1 shall without prejudice the provisions of Sections 9, 9A and 9AA be deemed to be conclusive as to the matters stated therein - Appeal allowed

Summary

Issues:
Clandestine removal of goods, penalty imposition on the appellant, applicability of Section 11A (1A) of Central Excise Act, 1944, waiver of pre-deposit requirement, setting aside of adjudication order and Order-in-Original.

Analysis:
The case involves the clandestine removal of goods by a firm, leading to the imposition of a penalty on the appellant who is an employee of the firm. The appellant discharged the duty liability, interest, and penalty to the extent of 25% before the issue of an adjudication order. The appellant's counsel argued that as per Section 11A (1A) of the Central Excise Act, 1944, if the person liable to pay duty settles the liability before the adjudication order, the proceedings against them and others are deemed concluded. Therefore, the penalty imposed on the appellant should not be sustained. The Tribunal considered the submissions and decided that the appeal itself can be decided without the need for pre-deposit, as per the provisions of the Act.

The Tribunal referred to Section 11A (1A) of the Central Excise Act, 1944, which states that if the person liable to pay duty has paid duty in full along with interest and penalty before the adjudication order, the proceedings against that person and others served notices shall be deemed conclusive. Based on this legal provision, the Tribunal concluded that the adjudication order and the Order-in-Original cannot be sustained. Consequently, the impugned order was set aside, and the appeal was allowed, providing consequential relief to the appellant. The decision was made after considering both sides' arguments and the legal provisions outlined in the Central Excise Act, 1944.

In summary, the Tribunal found that the appellant's pre-payment of duty, interest, and penalty to the extent of 25% before the adjudication order, in accordance with Section 11A (1A) of the Central Excise Act, 1944, led to the conclusion of proceedings against the appellant and others involved. As a result, the penalty imposed on the appellant was deemed unsustainable, and the appeal was allowed, setting aside the adjudication order and providing relief to the appellant.