2004 (5) TMI 374 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty for delay in payment of duty by a textile fabric processor.

Analysis:
The appellant, a textile fabric processor, was required to pay duty at compounded rates based on machinery production capacity. The appellant faced financial difficulties leading to delays in payment, for which a penalty of Rs. 11,25,000/- was imposed by lower authorities. The appellant argued that the penalty was excessive considering the short delays ranging from 1 to 28 days and the payment of interest at 24% for the period of delay.

The appellant cited precedents from the Tribunal in cases like J.K. Processors v. CCE and Supertik Industries v. C.C.E., where it was held that imposing the maximum penalty was not necessary. After reviewing the submissions and records, the Tribunal acknowledged that the duty amounts were paid, and the delays were minimal, with interest compensating the Revenue for the delay. Consequently, the Tribunal found the imposition of a substantial penalty unjustified and reduced it to Rs. 25,000/-, partially allowing the appeal to that extent.