2005 (1) TMI 546 - AT - Central Excise

Summary

Issues:
Appeal against penalty imposition and enhancement.

Analysis:
The case involved two appeals against a common order. The first appeal was filed by the assessee to set aside the penalty of Rs. 1.5 lakhs confirmed by the Commissioner (Appeals), while the second appeal was filed by the Revenue seeking an enhancement of the penalty. The assessees were engaged in the manufacture of MS bars under the compounded levy scheme but failed to discharge their duty under Section 3A. The adjudicating authority confirmed the demand with interest and imposed a penalty of Rs. 13,30,000, which was reduced to Rs. 1.5 lakhs by the Commissioner (Appeals).

The Counsel for the assessee argued that since duty was paid along with interest before the show cause notice, no penalty should be imposed. The Counsel referred to Tribunal judgments supporting this contention. On the other hand, the JDR argued that the non-payment of duty was deliberate, and the penalty should be enhanced as the assessees only deposited a small portion of the outstanding duty. After reviewing the facts, the Tribunal agreed with the JDR, stating that the assessees caused heavy loss to the Government by not paying the full duty amount without sufficient cause. The Tribunal found the imposition of penalty justifiable under Rule 96ZP(3)(ii) and disagreed with the Counsel's argument based on previous judgments.

Considering the conduct of the assessees and the amount of duty evaded, the Tribunal decided to enhance the penalty to Rs. 3 lakhs. Consequently, the appeal of the assessee was dismissed, and the appeal of the Revenue was allowed, modifying the impugned order. The operative part of the order was pronounced on 19-1-2005.