2004 (10) TMI 376 - AT - Central Excise

Summary

Issues:
1. Penalty under Rule 173GG of the Central Excise Rules, 1944 for delayed payment of duty.

Analysis:
The judgment deals with the issue of penalty imposed on an assessee for delayed payment of duty under Rule 173GG of the Central Excise Rules, 1944. The appellants had availed the monthly payment facility but had paid duty amounts for June and July 1999 beyond the due dates, resulting in the department wanting to penalize them as per sub-rule (3) of Rule 173GG. The jurisdictional Assistant Commissioner imposed a penalty of Rs. 500/- per day on the assessee, which was upheld by the Commissioner (Appeals), leading to the appeal before the Tribunal.

The Tribunal considered the arguments presented by the appellants' consultant and the SDR regarding the mandatory nature of the penalty provisions under Rule 173GG. The consultant argued that the penalty should be reduced or vacated, citing precedents, while the SDR contended that the penalty was mandatory as per the rule. The Tribunal delved into whether the penal provisions of sub-rule (3) of Rule 173GG were mandatory, emphasizing the need to analyze this in the context of the entire sub-rule.

Upon careful consideration, the Tribunal concluded that the penalty of Rs. 500/- per day should be proportionately reduced due to the presence of a double jeopardy situation. It noted that the interest on delayed duty payment already carried a penal element at 30% per annum, making an additional penalty of Rs. 500/- per day excessive and violative of the principle against double penalties for the same offense as enshrined in the Constitution of India. Therefore, the Tribunal reduced the penalty from Rs. 1.55 lakhs to Rs. 10,000, aiming to mitigate the double jeopardy effect and ensure a fair outcome in the case.

In light of the above analysis, the Tribunal modified the impugned order to reduce the penalty as directed and disposed of the appeal accordingly. The judgment highlights the importance of proportionality in penalty imposition and the need to avoid imposing multiple penalties for the same offense, ensuring a just and balanced approach in taxation matters.