2005 (2) TMI 551 - AT - Central Excise

Summary

Issues: Validity of penalty imposition under Rule 96ZP(3)(ii) of the Rules.

In this case, the Revenue contested the validity of the impugned order-in-appeal where the Commissioner (Appeals) had quashed the imposition of penalty on the respondents under Rule 96ZP(3)(ii) of the Rules. The respondents had declared their furnace as batch type and paid duty based on that classification. However, the competent authority determined the furnace as pusher type, leading to a higher duty liability. Although the respondents had paid the differential duty with interest, it was held that this alone could not justify quashing the penalty imposed on them. The Tribunal found that the respondents were liable to pay the penalty for non-payment of the appropriate duty under Rule 96ZP(3)(ii), and the Commissioner (Appeals) erred in quashing the penalty. Consequently, the Tribunal imposed a penalty of Rs. 10,000 on the respondents, modifying the decision of the Commissioner (Appeals) and upholding the penalty imposition.

Overall, the Tribunal's decision focused on the interpretation and application of Rule 96ZP(3)(ii) of the Rules in the context of the respondents' duty liability for their furnace classification. The judgment highlighted that the payment of the differential duty by the respondents, while important, did not absolve them of the penalty for non-payment of the appropriate duty as determined by the competent authority. The Tribunal emphasized the legal obligation of the respondents to pay the correct duty amount and upheld the imposition of the penalty based on the facts and circumstances of the case. The decision provided clarity on the consequences of misclassification and non-payment of duty under the relevant rule, ensuring compliance with the legal provisions governing duty liabilities in such cases.