2004 (9) TMI 504 - AT - Central Excise

Summary

Issues:
Challenge to imposition of penalty of Rs. 50,000 for non-payment of duty through cheques.

Analysis:
The appeal before the Appellate Tribunal challenged the imposition of a penalty of Rs. 50,000 on the appellants for non-payment of duty through cheques during the disputed period. The appellant's counsel argued that no penalty should be imposed as the duty payment through four cheques was in order, especially since the cheques were encashed. The counsel relied on a precedent set by the Larger Bench of the Tribunal in a specific case. On the other hand, the JDR representing the respondent supported the correctness of the impugned order imposing the penalty.

Upon reviewing the records, it was found that the appellants had issued four cheques for varying amounts to discharge duty during specific years. Although the cheques were eventually cleared by the bank, there was a delay of 15 to 18 days. This delay amounted to a contravention of Rule 9(1) of the Rules. The argument that there was sufficient balance in the appellants' accounts at the time of issuing the cheques, thus indicating no malicious intent, was dismissed. It was noted that if there was enough balance, there was no need to discharge duty through cheques and immediately credit the amount in their PLA.

The Tribunal concluded that the penalty was rightfully imposed on the appellants. It was clarified that the penalty was not for non-payment of duty but for not discharging duty as required by law. Referring to the precedent mentioned earlier, the Tribunal acknowledged that the deposit of cheques, even if not dishonored later, fulfills the duty payment requirement. Therefore, the penalty was reduced to Rs. 10,000 considering the circumstances of the case. The rest of the impugned order was upheld, and the appeal of the appellants was disposed of accordingly.