2000 (8) TMI 123 - AT - Central Excise

Summary

Issues:
1. Duty demand and penalty on modvat credit taken on alleged unreceived inputs.
2. Duty demand and penalty on clearance of H.R. Coils without payment of duty.
3. Penalty imposition on the manager of the appellant unit.

Issue 1: Duty demand and penalty on modvat credit taken on alleged unreceived inputs.

The appellants were involved in converting imported hot rolled steel coils into cold rolled coils and maintained a private bonded warehouse. The Commissioner of Central Excise, Vadodara had confirmed duties, penalties, and confiscations against the appellants, which were appealed. The Tribunal remanded the duty demand and penalty on modvat credit taken on alleged unreceived inputs back to the Commissioner. The Commissioner readjudicated the issue and set aside the demand of duty of Rs. 2,19,88,058.32 but imposed a penalty of Rs. 25 lakhs on the appellants under the Customs Act, 1962. The Commissioner's decision to impose the penalty was challenged, and the Tribunal found the penalty unjustified due to incorrect accounting practices by the appellants. The Tribunal set aside the penalty of Rs. 25 lakhs.

Issue 2: Duty demand and penalty on clearance of H.R. Coils without payment of duty.

Regarding the duty demand and penalty on the clearance of H.R. Coils without payment of duty, the Commissioner imposed a demand of Rs. 1,30,67,235 on 81 coils, confirming the demand for 56 coils and extending the benefit of doubt for 25 coils. Additionally, penalties were imposed on the appellants and the manager. The Tribunal reviewed the case and found discrepancies in the Commissioner's decision. It was observed that all coils suspected of being cleared without duty were eventually accounted for and duty paid. The Tribunal set aside the demand of Rs. 94,45,276.43, as the duty had already been paid on the coils in question.

Issue 3: Penalty imposition on the manager of the appellant unit.

The Commissioner had imposed penalties on the manager of the appellant unit under section 112(b) of the Customs Act, 1962. The Tribunal, after considering submissions, reduced the penalties imposed on both the appellant unit and the manager. The penalty on the appellant unit was reduced from Rs. 1,00,00,000 to Rs. 15,00,000, and the penalty on the manager was reduced from Rs. 10,00,000 to Rs. 50,000. The reduction was based on various factors, including the appellant unit's financial situation and the manager's role in the irregularities.

This detailed analysis covers the duty demands, penalties, and remanded issues in the legal judgment delivered by the Appellate Tribunal CEGAT, Mumbai.