2005 (2) TMI 602 - AT - Central Excise

Summary

Issues:
Imposition of penalties under Section 11AC and Rule 173Q for duty payment discrepancies.

Analysis:
The case involved appeals against penalties imposed on the appellants for discrepancies in duty payment based on prices prevailing at depots. The Assistant Commissioner did not impose penalties, attributing the lesser payment to price fluctuation at the depot. However, the Commissioner (Appeals) imposed penalties under Rule 173Q, stating they were not imposable under Section 11AC. The appellants contended that the Commissioner's order was erroneous and contradictory, as the ingredients for penalties under Section 11AC and Rule 173Q were the same.

Upon review, the Commissioner (Appeals) found that the penalties under Section 11AC were not warranted due to no wilful misstatement or suppression of facts to evade duty. The variation in declared prices was attributed to price fluctuations, not intentional evasion. However, the appellants failed to discharge the correct duty at the time of clearance, contravening statutory provisions and rendering them liable for penalties under Rule 173Q. The Commissioner upheld the penalties under Rule 173Q, citing the appellants' obligation to declare correct prices and discharge due duty at clearance.

The Commissioner's order highlighted that the appellants' payment discrepancies were due to price fluctuation and communication gaps, leading to instances where duty was paid at higher values as well. These findings indicated no intentional evasion, justifying the allowance of the appeals and consequential relief for the appellants. The judgment clarified the distinction between penalties under Section 11AC and Rule 173Q, emphasizing the necessity to comply with statutory provisions to avoid penal action.