Tribunal Upheld Duty Demand & Penalties for Clandestine Goods Removal, Granted Reduced Penalty

The Tribunal upheld duty demand and penalties due to clandestine removal of goods based on the Director's admission. However, acknowledging timely payment of duty and interest, the Tribunal granted appellant reduced penalty under Section 11AC, reducing the penalty to 25%.

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Issues:
Clandestine removal of goods, validity of statement recorded under pressure, duty demand confirmation, penalty imposition, benefit of reduced penalty under Section 11AC.

Analysis:
1. Clandestine Removal of Goods:
The case involved a search at a factory premises where the Director admitted to clandestine removal of goods and agreed to pay Central Excise Duty. The statement recorded from the Director confirmed receipt of raw materials and their use in manufacturing products that were clandestinely removed without paying duty. The Tribunal found the charges of clandestine removal proved based on the Director's admission and upheld the duty demand and penalties confirmed in the impugned order.

2. Validity of Statement Recorded Under Pressure:
The appellant argued that the Director's statement was involuntary and recorded under pressure, making it unreliable to confirm the duty demand. However, the Tribunal noted that the Director's admission was voluntary and not retracted before the authorities, leading to the conclusion that the duty demand confirmation based on the statement was legal and justified.

3. Penalty Imposition and Benefit of Reduced Penalty:
The appellant contended that since the duty and interest were paid within a month of the adjudication order, they should be entitled to the benefit of reduced penalty under Section 11AC of the Central Excise Act, 1944. The Tribunal agreed and directed the adjudicating authority to quantify the reduced penalty amount for the appellant, thereby partially allowing the appeal by reducing the penalty to 25%.

In conclusion, the Tribunal upheld the duty demand and penalties based on the Director's admission of clandestine removal. However, recognizing the timely payment of duty and interest, the Tribunal granted the appellant the benefit of reduced penalty under Section 11AC, thereby reducing the penalty imposed.

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