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2015 (10) TMI 149 - AT - Central ExciseClandestine removal of the finished goods - Penalty u/r 26 - Held that - Regarding the imposition of penalty on the co-appellants, the Learned Advocate relied upon the decision of the Tribunal in the case of M/s. Shitala Prasad Sharma (2004 (12) TMI 195 - CESTAT, MUMBAI). It has been held that when main accused stands absolved of penal consequences, no question of penalty on co-accused. In the present case the penal consequences on the main appellant was upheld and therefore, the case law relied by the appellant would not apply in this case. I find that the Appellant 3 to 5 were merchant manufacturers, supplied grey fabric to the Appellant No. 1, where the penalty under Section 11 AC of the Act was invoked. Considering the overall facts and circumstances of the case, the quantum of penalty on the co-notices should be reduced. - demand of duty along with interest and penalty on appellant No. 1 M/s Praygraj Dyg. & Ptg. Mills Pvt. Ltd. is upheld. It is directed that if, the duty alongwith interest as determined by the Adjudicating Authority is paid within thirty days of communication of this order penalty liable to the pay shall be 25% of the duty and to be paid within the period so specified. Penalty on Shri Surendra Kumar Dalmia Director of the appellant No. 1 is reduced to ₹ 50,000/- and other appellants reduced to ₹ 25,000/- each - Decided partly against assessee.
Issues:
- Clandestine removal of finished goods without duty payment - Confirmation of duty demand, interest, and penalty - Applicability of Section 11 AC of the Central Excise Act, 1944 - Imposition of penalty on co-accused - Reduction of penalties based on legal precedents Clandestine Removal and Duty Demand: The case involved the detection of clandestine removal of finished goods without payment of duty by the appellant company, leading to a demand of duty amounting to Rs. 14,92,924 along with interest. The Adjudicating Authority confirmed this demand and imposed a penalty equal to the duty amount on the appellant, who paid the entire sum before the issuance of the Show Cause Notice. Applicability of Section 11 AC: The main contention raised by the appellant's advocate was that the Adjudicating Authority did not provide the option to pay a reduced penalty of 25% of the duty under Section 11 AC of the Central Excise Act, 1944. Citing legal precedents, the advocate argued that the appellant should have been given the opportunity to avail this provision within a specified period. Imposition of Penalty on Co-Accused: The Revenue representative opposed the reduction of penalties, highlighting that the interest and penalty of 25% of the duty had not been deposited by the appellants. It was argued that penalties on co-accused were justified, as the main appellant had not contested the case on its merits. However, the tribunal found that the penalties on co-accused should be reduced based on the overall facts and circumstances of the case. Judgment and Penalty Reduction: The tribunal, after considering the arguments and legal provisions, upheld the demand of duty, interest, and penalty on the main appellant. It directed that if the duty along with interest was paid within thirty days, the penalty would be reduced to 25% of the duty. The penalty on the Director of the appellant company was reduced to Rs. 50,000, and on other co-accused to Rs. 25,000 each based on the specific circumstances of the case and legal precedents. The appeals were disposed of accordingly, and the application for extension of the stay order was dismissed as infructuous.
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