2016 (1) TMI 1249 - AT - Central Excise

Tribunal Upholds Appeal Dismissal in Excise Duty Case

Commissioner of Central Excise, Raipur Versus Suresh Kumar Goyal

The tribunal dismissed the Revenue's appeal, upholding the Order-in-Appeal that did not impose a penalty on the Director of M/s. Ganpati Ispat despite a ... Imposition of penalty on company and director - whether imposition of penalty justified on the ground that respondent (M/s. Ganpati Ispat) paid the entire amount of duty demand along with interest and 25% of the mandatory equal penalty within 30 days of issuing the SCN - Section 11A(1A) of the Central Excise Act, 1944 - Held that: - As per the said section, once the payments as Section 11A(1A) ibid were made, no notice was required to be served and the proceedings in respect of other persons also were to be deemed to be concluded - the proceedings against the appellant were required to be deemed to be concluded with the payments made - appeal dismissed - decided against Revenue. Issues:- Appeal against Order-in-Appeal dated 28-1-2010 upholding Order-in-Original dated 16-1-2009.- No penalty imposed on Director of M/s. Ganpati Ispat despite demand for excise duty due to clandestine clearance.- Contention regarding liability to penalty under Section 11A(1A) of the Central Excise Act, 1944.- Interpretation of Section 11A(1A) regarding payment of duty, interest, and penalty.- Conclusion of proceedings against the appellant based on payments made within 30 days of show cause notice.Analysis:The appeal was filed by Revenue against the Order-in-Appeal dated 28-1-2010 that upheld the Order-in-Original dated 16-1-2009, wherein no penalty was imposed on the Director of M/s. Ganpati Ispat despite a demand for excise duty due to clandestine clearance. The show cause notice issued to M/s. Ganpati Ispat demanded excise duty along with interest and penalties for evading duty. M/s. Ganpati Ispat paid the entire duty demand, interest, and 25% of the mandatory equal penalty within 30 days of the notice, leading to the absence of a penalty on the appellant.The main contention in the appeal was whether the Director would still be liable to penalty under Section 11A(1A) of the Central Excise Act, 1944, despite the payments made by M/s. Ganpati Ispat. Section 11A(1A) states that if duty has not been paid due to fraud, collusion, or wilful misstatement, the person may pay the duty, interest, and a penalty within thirty days of receiving a notice. Once these payments are made, no further notice is required, and proceedings are deemed to be concluded.The analysis of Section 11A(1A) revealed that since the duty, interest, and 25% of the mandatory penalty were paid within 30 days of the show cause notice, the proceedings against the appellant were required to be deemed concluded. It was undisputed that the proceedings against the appellant were solely related to the impugned duty, and as per the section, no further notice was necessary once the payments were made within the stipulated time frame.Based on the above interpretation and analysis, the tribunal found no fault in the impugned order. Consequently, the Revenue's appeal was dismissed, affirming that the proceedings against the appellant were concluded by the timely payments made by M/s. Ganpati Ispat within the specified period.