AARTI STEEL INDUSTRIES, Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) Appeal No. E/322/08

(2.) IN adjudication of a show-cause notice, which invoked the extended period of limitation under Section 11A(1) of the Central Excise Act for recovery of duty on certain finished goods which were alleged to have been clandestinely removed from factory, the original authority confirmed demand of duty of Rs. 2,87,191/- against the appellant with interest of Rs. 24,549/- and imposed on them a penalty of Rs. 2,87,191/-. The interest on duty was sought to be recovered under Section 11AB of the Act and penalty was proposed under Section 11AC of the Act. Twenty five percent of the above penalty was paid on 7.11.2007, within 3 months from the date of receipt of the Order -in -Original. On this basis, in an appeal filed by the assessee, the Commissioner (Appeals) held that it was not required to pay any further amount as penalty under Section 11AC. Subject to this finding, the order of adjudication was sustained. In the present appeal, the appellant prays for setting aside the appellate Commissioner's order. However, in column No. 8 of the memorandum of appeal, the only issue mentioned relates to penalty imposed under Section 11AC of the Act. The grounds of this appeal are also, by and large, against this penalty. After hearing both sides and considering their submissions, I find that the appellant has no case that the order of the original authority confirming demand of duty against them was not made under Sub-section (2) of Section 11A. The amount of duty so determined and the interest thereon were paid prior to issuance of show-cause notice itself. In this scenario, the appellant, alter adjudication the case, paid 25% of the amount in terms of the first proviso to Section 11AC. Taking this fact into account, the Commissioner (Appeals) set aside the rest of the penalty. The appellant can have no grievance against the decision of the lower appellate authority. As a matter of fact, any valid ground has not been raised in its appeal against the decision of the lower appellate authority regarding penalty. The appeal is dismissed.

(3.) UNDER the above provision, any person who acquires possession of or is in any way concerned in physically dealing with any excisable goods which, he knows or has reason to believe, are liable to confiscation under the Act or the Rules shall be liable to a penalty. For application of this rule, there must be a finding that certain excisable goods are liable to confiscation under the Central Excise Act or the Central Excise Rules and there must be a further finding that the person who is sought to be penalised has acquired possession of such goods or has otherwise physically dealt with the goods, knowing or believing that the goods are liable to confiscation. No finding of this sort is forthcoming in this case against the appellant. Even the show -cause notice did not allege that Shri Agarwal had removed the goods with the knowledge or belief that such goods were liable to confiscation under the Central Excise Act or the Central Excise Rules. In this scenario, the penalty imposed on the appellant under Rule 26 cannot be sustained. Appeal E/324/08 is allowed.