1982 (4) TMI 75 - HC - Central Excise

Summary

Issues:
- Exemption from Central Excise duty on Straw Board
- Manufacturing "Rice" without exemption
- Value of clearances exceeding exemption limit
- Adjudication by Collector, Central Excise, Kanpur
- Appeal before Customs, Excise and Gold (Control) Appellate Tribunal
- Stay application for waiver of penalty
- Tribunal's order on penalty waiver
- Financial hardship considerations
- Interpretation of exemption limit
- Comparison with previous court cases
- Realism in dispensation of penalty

Analysis:

The petitioner was availing exemption from Central Excise duty on Straw Board but was found manufacturing "Rice" without exemption. The value of clearances of both products exceeded the exemption limit of Rs. 20 Lakhs for three financial years, making the petitioner ineligible for the exemption. Consequently, the Collector, Central Excise, Kanpur, adjudicated the case, imposing duty of Rs. 14,135/- and a penalty. The petitioner appealed to the Customs, Excise and Gold (Control) Appellate Tribunal, seeking a waiver of the penalty. The Tribunal's order dated 23-9-1985 dispensed with the penalty but required the petitioner to deposit the customs duty amount, leading to the writ petition challenging this order.

The Tribunal's judgment addressed three main arguments raised by the petitioner. Firstly, regarding the ex parte nature of the Collector's order, the Tribunal noted multiple opportunities given to the petitioner for a response, concluding it was not a case of a single unheeded notice. Secondly, the dispute over the exemption limit and notification interpretation was deemed a point for final hearing, not for penalty waiver consideration. Financial hardship was also evaluated, with the Tribunal acknowledging the petitioner's unsatisfactory financial position but still directing the deposit of customs duty while staying the penalty recovery.

The petitioner's reliance on previous court cases, specifically Luxco Electronics and M.C. God, was examined. In the cited cases, directions from the High Court regarding time-barred demands were crucial for stay applications. However, in the present case, such points were not raised during the Tribunal proceedings, rendering the petitioner's contentions unsubstantiated. The Tribunal's realism in dispensing with a portion of the deposit amount was affirmed, indicating a fair approach in the penalty waiver decision. Ultimately, the writ petition was dismissed due to the lack of appearance by the respondents during the hearing, and the interim order was vacated.