2015 (7) TMI 29 - AT - Central Excise

Levy of penalty u/s 11C - Duty demand - Shortage of goods - Clandestine removal of goods - Held that - Appellant has paid the duty at the time when shortage was detected. Later on, the department issued a show cause notice for appropriation of duty paid by the appellant and imposition of penalty. The appellant did not contest the duty liability but contested only penalty till the level of Commissioner (Appeals). When learned Commissioner (Appeals) has given a finding that there is no tangible evidence of clandestine removal of goods, therefore appellant cannot be allowed to contest the duty liability taking support of Hri Sidhdata Ispat Pvt. Ltd. In Impugned order the learned Commissioner (Appeals) has given a clear finding that there is no tangible evidence of clandestine removal of goods. In these circumstances, without challenging the said order by the Revenue, I hold that penalty on appellant is not imposable. - Decided in favour of assessee.

Summary

Issues:
1. Confirmation of duty, interest, and penalty against the appellant.
2. Contesting the duty liability and penalty imposed.
3. Applicability of previous decisions in the case.

Analysis:
Issue 1: The appellant appealed against the confirmation of duty, interest, and penalty in the impugned order. The case involved a shortage of inputs and finished goods detected during a factory visit, leading to the appellant paying the duty. A show cause notice was issued for duty appropriation and penalty imposition under Section 11C of the Act. The adjudication confirmed the demand, appropriation, and penalty. The Commissioner (Appeals) upheld the demand and penalty despite finding no tangible evidence of clandestine goods removal. The appellant contested the duty liability and penalty, leading to the current appeal.

Issue 2: The appellant argued that since the Commissioner (Appeals) found no tangible evidence of clandestine goods removal, duty and penalty should not be payable. The appellant relied on previous decisions to support this argument. The respondent contended that the appellant only contested the penalty, not the duty, during the proceedings. The Tribunal considered both parties' submissions and the facts of the case. It noted that the appellant paid duty upon detection of the shortage and did not contest duty liability until the Commissioner (Appeals) level. Given the lack of challenge to duty liability earlier, the Tribunal held that the appellant could not contest it now based on the previous decisions cited.

Issue 3: The Tribunal found that the previous decisions cited by the appellant were not directly applicable to the current case due to the difference in facts and the appellant's failure to contest duty liability earlier. The Tribunal also noted that the Commissioner (Appeals) had already determined the absence of tangible evidence for clandestine goods removal, leading to the setting aside of the penalty against the appellant. The Tribunal modified the impugned order accordingly, disposing of the appeal in favor of the appellant on the penalty issue.

In conclusion, the Tribunal's decision focused on the appellant's failure to contest duty liability earlier in the proceedings, leading to the setting aside of the penalty based on the absence of tangible evidence for clandestine goods removal. The previous decisions cited were deemed inapplicable due to the specific circumstances of the case.