RAYBAND CHEMICALS, INDORE Vs. CCE, INDORE

JUDGEMENT

(1.) Having carefully examined the records and heard both sides, I am taking up the appeal itself for final disposal.

(2.) The department framed a case of clandestine removal of the excisable goods without payment of duty, against the appellants on the basis of he results of an inspection conducted by its officers in the factory and depot premises of the party on 31.03.1998. The officers seized certain quantities of paints and varnishes from the premises. It appeared to them that the appellants, an SSI unit, had crossed the exemption limit of clearance value of R. 30 lakhs prescribed under Notification No. 1/93 -CE dated 28.02.1993 for the period 1997 -98. Accordingly, the Department issued a show -cause notice (SCN) to the party for confiscation of the seized goods and for recovery of duty of excise on the goods cleared in excess of the aforesaid limit as also for imposing penalties on the party under the provisions of Sections 11AC of the Central Excise Act and Rule 173Q of the Central Excise Rules, 1944. The SCN was contested by the noticee. The jurisdictional Additional Commissioner of Central Excise, who adjudicated the dispute, ordered confiscation of the goods with option for redemption thereof on payment of fine; confirmed the demand of duty to the extent of Rs. 20,607/ - against the appellants on the goods cleared in excess of the limit of R. 30 lakhs and adjusted the duty paid on 06.04.1998 against the demand so confirmed; imposed on the party penalties of Rs. 20,607/ - and Rs. 10,000/ - under Section 11AC and Rule 173Q respective; and directed the party to pay interest on the aforesaid duty amount under Section 11AB of the Act. Aggrieved by the order of the Additional Commissioner, the party preferred appeal to the Commissioner (Appeals). They also filed an application for waiver of pre -deposit on the penalty amounts and for stay of recovery thereof under Section 35F of the Act. In that stay application, they inter alia, made a specific prayer for personal hearing. The prayer was, however, not granted by the lower appellate authority. The authority passed "interim stay order" dated 25.04.2000 directing the appellants to deposit the adjudged dues. It appears from the records that, upon receipt of the stay order, the appellants submitted an application seeking modification of the stay order after personal hearing. Upon that application, the Commissioner (Appeals) fixed a hearing to 13.07.2000. The appellants then asked for an adjournment to the next day (14.07.2000). On that day too, the appellants did not present themselves before the Commissioner (Appeals). Subsequently, the appeal was taken up by the Commissioner (Appeals) for final disposal, which resulted the party's appeal on the sole ground of non -compliance with the interim stay order dated 25.04.2000 without looking into the merits of the case.

(3.) It is submitted today by ld. Advocate Shri A.C. Upadhyay for the appellants that an amount of Rs. 30,000/ - had already been paid by the appellants on 06.04.1998 towards duty of excise on the goods cleared from their factory during 1997 -98 in excess of the clearance limit of Rs. 30 lakhs prescribed under Notification No. 1/93 and that such deposit was adjusted against the demand of duty confirmed as per the order of the adjudicating authority. Ld. Advocate submits that, after having acknowledged satisfaction of the demand of duty, it was not open to the adjudicating authority to impose mandatory penalty (penalty equal to the amount of duty confirmed) on the party under Section 11AC of the Act. he, further, submits that, evenafter adjustment as above, an amount of Rs. 9,393/ - was still available for appropriation towards any penalty under Rule 173Q and, therefore, the order directing payment of the penalty of Rs. 10,000/ - under the Rule was also unjustified. Ld. Advocate, therefore, submits that the appellants have a strong prima facie case for waiver of pre -deposit and stay of recovery in respect of the penalties imposed by the adjudicating authority. With regard to the proceedings of the Commissioner (Appeals), Counsel submits that both the interim stay order and the final order of that authority are in patent violation of the principles of natural justice as no opportunity of personal hearing was granted to the appellants before passing those orders.