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Our Legal Correspondent

Chennai, Feb. 12

An order by Superintendent of Central Excise, Ambasamudram, imposing a penalty of Rs 1.76 lakh on a Tirunelveli-based exporter for alleged non-payment of duty, was set aside by the Madurai Bench of Madras High Court.

The Court, while allowing a writ petition from Vigneswar Exports, challenging the order, directed the Excise authorities to issue notice to the petitioner and proceed with the imposition of penalty on merits.

The firm, an export-oriented unit, came to be in possession of its property on a tripartite accord among them, vendor and Canara Bank.

Before the transaction, a show-cause notice was issued by Superintendent of Central Excise, Ambasamudram, asking purchasers to discharge customs duty of Rs 5,24,454 under Section 59(2) of Customs Act, 1964, for not utilising imported raw materials within the time frame of one year; further duty of Rs 1,26,317 was also levied under Section 11A of the Central Excise Act, 1944.

The petitioner firm executed a bank guarantee on September 4, 2003, towards duty liability.

The Joint Commissioner of Central Excise, Tirunelveli, on March 24, 2004, levied penalty for non-payment of duty within the stipulated time. He, however, did not issue notice to the purchaser.

The department contended that the petitioner was bound to pay penalty.

The judge ruled that the contention of Assistant Solicitor-General that the respondents (Excise Department) had fulfilled formality of passing order, including levy of penalty was not acceptable.

Respondents should proceed with imposition of penalty after affording opportunity to the petitioner.

Hence, the impugned order imposing penalty was set aside. The department was directed to issue notice to the petitioner and after affording opportunity to proceed with levy of penalty.

More Stories on : Courts/Legal Issues | Excise and Customs | Tamil Nadu

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Non-payment of excise duty: Notice should precede levy of penalty, rules HC

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