Penalty waiver for appeal admission and interim stay of coercive recovery pending final hearing under excise law

The Tribunal applied Section 35F of the Central Excise Act, 1944 to waive the penalty only for the limited purpose of entertaining the appeal, while keeping the merits open for detailed hearing. It noted that the dispute, including allegations of siphoning off sale consideration and liability under Rule 209A of the Central Excise Rules, required full consideration at the final stage. Coercive recovery of the penalty was therefore stayed until further orders, giving the appellant interim protection pending adjudication.

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Issues: Whether the penalty imposed on the appellant should be waived for the purpose of entertaining the appeal and whether coercive recovery should be stayed pending final hearing.

Analysis: The order records that the dispute on merits, including the allegation of siphoning off sale consideration and liability under Rule 209A of the Central Excise Rules, required detailed hearing. For the purpose of admitting the appeal, the Tribunal exercised the power under Section 35F of the Central Excise Act, 1944 and granted interim protection against enforcement of the penalty.

Conclusion: The penalty was waived for the limited purpose of entertaining the appeal and coercive action for recovery of the penalty was stayed until further orders.

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