2015 (10) TMI 121 - AT - Central Excise

Duty demand jointly and severally - Tribunal in the same appellants case vide earlier orders 2015 (9) TMI 1317 - CESTAT NEW DELHI and 2014 (3) TMI 983 - CESTAT NEW DELHI have held that such confirmation of demands or imposition of penalties jointly and severally are not in accordance with the law - . The duty demand being of pre-September 1996 period, the same was immune from interest liability under Section 11AB and the interest liability under Section 11AA, as the same stood during that period, would arise only on expiry of three months from the date of the adjudication order. It was, therefore, in the interest of the Department to complete the adjudication as early as possible. But surprisingly the matter was adjudicated for the first time only vide order dated 26/5/10 and this adjudication was done in such a manner that there was no option for the Tribunal but to remand this matter for denovo adjudication, as the order bearing the date of the decision as 26/5/10 was bearing the signature of the Commissioner who had retired long time back and the order had been passed without supply of documents and without hearing the appellant. The only persons to gain from such avoidable delay in adjudication of this matter are M/s GTC Industries Ltd. and M/s MP Tobacco Ltd. against whom the duty demand may be confirmed, as the interest liability under Section 11AA of the person held to be liable to pay the duty would start only on expiry of three months from the date of the adjudication order. - We hope that the Central Board of Excise & Customs (CBEC), takes these matters against M/s GTC Industries Ltd. seriously and this time, the matter is adjudicated strictly in accordance with our observations and directions in this order and an expeditiously as possible.

Summary

Issues:
1. Confirmation of duties against two companies jointly and severally.
2. Compliance with directions in earlier remand orders.
3. Denovo proceedings and imposition of penalties.
4. Adjudication process delays and interest liabilities.

Issue 1: Confirmation of duties against two companies jointly and severally
The judgment addresses the issue of confirming duties against two companies jointly and severally. The Tribunal notes that in earlier orders, it was held that such confirmation of demands or penalties jointly and severally is not in accordance with the law. The matter was remanded to the Commissioner for a fresh decision to determine the actual manufacturer of the cigarettes in question. The Tribunal directs the adjudicating authority to follow the instructions contained in the Final Order of the Tribunal during the denovo proceedings. It emphasizes the need for clear findings on the actual manufacturer to avoid joint imposition of penalties.

Issue 2: Compliance with directions in earlier remand orders
Another issue highlighted in the judgment is the lack of compliance with directions in earlier remand orders during denovo proceedings. The Tribunal instructs the adjudicating authority to adhere to the directions given in previous remand orders to ensure a proper adjudication process. It stresses the importance of following the Tribunal's instructions for a fair and lawful decision-making process.

Issue 3: Denovo proceedings and imposition of penalties
The judgment discusses the denovo proceedings and the imposition of penalties under Rule 173Q (1). It emphasizes that penalties should be imposed only on the person held to be the actual manufacturer who cleared the cigarettes without paying duty. The Tribunal clarifies that joint penalties cannot be imposed on multiple entities and underscores the necessity for clear findings on the responsible party to avoid unjust penalties.

Issue 4: Adjudication process delays and interest liabilities
The judgment also addresses the delays in the adjudication process and the resulting interest liabilities. It highlights the significant duty demand amount and the need for expedited adjudication to prevent undue delays. The Tribunal expresses concern over the careless manner in which the adjudication was conducted, leading to remands and further delays. It emphasizes the importance of timely adjudication to prevent interest liabilities from accumulating and urges the Central Board of Excise & Customs to take the matter seriously for swift resolution.

In conclusion, the judgment focuses on ensuring a fair and lawful adjudication process, emphasizing compliance with directions, avoiding joint imposition of penalties, and expediting the resolution to prevent interest liabilities from accruing.