2018 (7) TMI 160 - AT - Central Excise

Clandestine removal - integrated steel plants - excesses and shortages of stock - demand of differential duty with interest and penalty - Held that - In the circumstances of the present case, the excess stocks have been adjusted against the shortages and the Adjudicating Authority has finally arrived at figure ₹ 1.97 crores duty demand - there is no justification for imposition of penalty under Section 11AC in view of the Board Circular No.486/52/99-CX dated 23.09.1999 by which the integrated steel plants were required to only make payment of duty demand but there is no justification of imposition of any penalty. Demand of interest under Section 11AB - Held that - It is to record that the section 11AB was introduced in the statute book on 28.09.1996 and the Commissioner has recorded in the impugned order that period of the present demand pertains to the period prior to such date - the duty demand has been paid by the respondent within a period of three months from the date of passing of the order and hence there is no justification to insist on payment of interest u/s 11AB. Quantum of redemption dine and penalty - Held that - As per show cause notice the duty demand was amounting to ₹ 31,31,13,259/- while the demand as per the impugned order is ₹ 1,97,99,605/-. The adjudicating authority has also adjusted the excess and shortages which resulted in reduction of the overall demand - there is no reason to interfere with the redemption fine and penalty imposed by the adjudicating authority. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Imposition of penalty under Section 11AC of the Act
2. Demand of interest under Section 11AA
3. Enhancement of redemption fine on account of confiscation of goods

Analysis:

Issue 1: Imposition of penalty under Section 11AC of the Act
The Tribunal noted that the excess stocks were adjusted against shortages, resulting in a duty demand of ?1.97 crores. Referring to a Board Circular, the Tribunal found no justification for imposing a penalty under Section 11AC. The respondent had already paid a penalty of ?20.00 lakh imposed by the adjudicating authority, which was not challenged. Therefore, the Tribunal upheld the decision not to impose an additional penalty under Section 11AC.

Issue 2: Demand of interest under Section 11AA
The Tribunal considered the demand for interest under Section 11AB, introduced in 1996. The Commissioner stated that the demand period preceded the introduction of Section 11AB. As the duty demand was paid within three months of the order, the Tribunal found no basis to require payment of interest under Section 11AB. Consequently, the Tribunal concluded that no interest under Section 11AB was justified.

Issue 3: Enhancement of redemption fine on account of confiscation of goods
The Revenue sought to increase the redemption fine and penalty imposed by the adjudicating authority. The Tribunal observed that the initial duty demand was significantly higher than the final demand, as adjustments were made for excess and shortages. Consequently, the Tribunal found no grounds to interfere with the redemption fine and penalty imposed by the adjudicating authority. Thus, the Tribunal upheld the redemption fine and penalty as determined by the adjudicating authority.

In conclusion, the Tribunal dismissed the appeal filed by the Revenue, maintaining the decisions on penalty, interest, and redemption fine. The judgment provided detailed reasoning for each issue raised by the Revenue, considering legal provisions and relevant precedents to arrive at its decision.