2011 (1) TMI 522 - AT - Central Excise

Penalty u/s 11AC - Rules 9(2) 52A and Rule 226 of the Central Excise Rules 1944 -here a penalty was imposed on the assessee under Sec. 11AC of the Act on the ground of contravention of provisions of the Central Excise Rules 1944 with intent to evade payment of duty all the offences under the aforesaid rules stand covered by the penalty imposed under Section 11AC - Therefore no separate penalty under Rule 9(2) Rule 52A or Rule 226 of the Central Excise Rules 1994 is liable to be imposed on the assessee - The above penalty of Rs. 25, 000/- is therefore vacated - Hence the ROM application stands allowed

Summary

Issues:
1. Apparent mistake in Final Order regarding imposition of penalties under Rule 9(2) and Rule 52A.
2. Apparent mistake in sustaining penalty under Rule 226.
3. Whether separate penalty under Rule 9(2), Rule 52A, or Rule 226 is warranted when penalty under Sec. 11AC is upheld.
4. Modification of the impugned order and disposal of the appeal.

Analysis:

1. The application filed by the Revenue highlighted an apparent mistake in the Final Order regarding the imposition of penalties under Rule 9(2) and Rule 52A. The mistake was acknowledged as both rules provided for penalties. The counsel for the assessee argued that since a penalty was already imposed under Sec. 11AC of the Central Excise Act, no separate penalty under Rule 9(2) or Rule 52A should be imposed. This argument was not contested, leading to the deletion of the erroneous finding in paragraph 8 of the Final Order.

2. Another mistake was noted in sustaining the penalty under Rule 226. The Tribunal observed that the penalty under Rule 226 also stood covered by Sec. 11AC, based on the reasoning presented by the counsel. Consequently, the penalty under Rule 226 was also vacated, and the erroneous findings recorded with reference to Rule 226 were omitted.

3. The Tribunal substituted a paragraph in the Final Order, emphasizing that when a penalty is imposed under Sec. 11AC for contravention of provisions of the Central Excise Rules, no separate penalties under Rule 9(2), Rule 52A, or Rule 226 should be imposed. Therefore, the penalty of Rs. 25,000 imposed under these rules was vacated. With this modification, the impugned order was sustained, and the appeal was disposed of.

4. The Tribunal allowed the ROM application to the extent mentioned in the revised paragraph. The judgment was pronounced in court, reflecting the modifications made to rectify the apparent mistakes in the imposition of penalties under various rules and sections of the Central Excise Act.