2012 (6) TMI 278 - AT - Central Excise

Tribunal reduces penalty, remands for fresh decision due to contradictions in appellant's submissions.

The Tribunal reduced the penalty imposed on the appellant to Rs. 50,000. The Chief Commissioner rejected the compounding application due to contradictions ... Application for compounding of offence rejected as there are demonstrable contradictions or inconsistencies or incompleteness –Held that:- Before the compounding of offence takes place, the penalty imposed is liable to be paid and the basic principle while filing application for compounding of offence is that the offence is admitted - Just because the appellant took a different ground in reply to show cause notice while making the application, it cannot be said that he has failed to disclose the material facts – as at the time of giving statement and at the time of replying to the show cause notice the appellant was working with the Company under the directions of same Company and the common thread as observed that the appellant acted as per the directions of the Managing Director thus it cannot be said that there was deliberate suppression of facts or non-disclosure of material facts. Rectification of mistake (ROM) before the Tribunal against final order – Held that:- If the appellant were to pursue the ROM, it would be for his benefit and the fact of filing of ROM and non-consideration of the same by the Tribunal has affected the appellant adversely and in no way benefitted him - non-pursuing of the ROM application and non-mentioning the fact of filing of application, cannot be said to be non-declaration of material fact or suppression and such non declaration or suppression in no way would benefit the appellant. Submission that the order passed by the Chief Commissioner was an administrative order and therefore is not appealable – Held that:- As decided in DHARAMPAL SATYAPAL LTD. Versus COMMR. OF C. EX., SHILLONG [2008 (3) TMI 86 (Tri)] since the Chief Commissioner will be exercising the power of the Commissioner while adjudicating the matter, there would be normally no dispute about the Appellate Tribunal hearing an appeal against such an Order. Moreover, we note that Section 35B(l)(c) of the Central Excise Act, 1944 provides an appeal to this Tribunal against an Order passed by the Central Board of Excise and Customs, which is a higher authority than the Chief Commissioner. Rejection of the request for compounding of offense on these grounds cannot be sustained - the impugned order is set-aside and the matter is remanded to the Chief Commissioner to decide the matter afresh. Issues:1. Reduction of penalty imposed on the appellant by the Tribunal.2. Rejection of application for compounding of offences by the Chief Commissioner.3. Jurisdiction of the Tribunal to hear appeals against orders passed by the Chief Commissioner.4. Allegations of contradictions and omissions in the submissions made by the appellant.Analysis:1. The Tribunal had reduced the penalty imposed on the appellant to Rs. 50,000 in an appeal filed against the confirmation of duty demand and penalty. However, a criminal case was lodged against the appellant, the Managing Director, and the Company. The appellant later filed an application for rectification of mistake, which has not been pursued further.2. The Chief Commissioner rejected the appellant's application for compounding of offences citing contradictions in the submissions made by the appellant. The rejection was based on Circular No. 29/2009-Cus, which states that applications cannot be allowed in case of demonstrable contradictions or inconsistencies.3. The issue of jurisdiction arose regarding the Tribunal's authority to hear appeals against orders passed by the Chief Commissioner. The appellant argued that the Tribunal has jurisdiction based on previous decisions, including the case of Dharampal Satyapal Limited vs. CCE, Shillong, and Videocon Industries Limited vs. Tribunal Mumbai.4. The Chief Commissioner found contradictions in the appellant's submissions regarding his role in the offence, details of a previous application, and payment of reduced penalty under protest. The appellant argued that he acted as per the Managing Director's directions and that there was no deliberate suppression of facts. Various legal precedents were cited to support the argument that omissions should not lead to dismissal of the application.5. The Tribunal concluded that the rejection of the compounding request based on the alleged contradictions and omissions could not be sustained. The matter was remanded to the Chief Commissioner for a fresh decision after providing a reasonable opportunity to the appellant.