2004 (12) TMI 606 - AT - Central Excise

Summary

Issues:
- Questioning correctness of impugned order setting aside penalties for delayed payment of duty under Rule 96ZO.
- Legality of setting aside penalties by Commissioner (Appeals) under Rule 96ZO.

Analysis:
Issue 1: The Revenue challenged the impugned order of the Commissioner (Appeals) regarding the setting aside of penalties imposed on the respondents for delayed payment of duty under Rule 96ZO. The learned SDR argued that penalties were mandatory under the Rules and could not be set aside by the Commissioner (Appeals). On the other hand, the learned Counsel supported the impugned order's correctness.

Issue 2: Upon reviewing the records and hearing both sides, it was found that the respondents, who were under the compounded levy scheme, failed to make duty payments on time but later deposited the duty. The adjudicating authority imposed penalties, which were set aside by the Commissioner (Appeals). The Tribunal noted that penalties were imposed on the assessee in similar cases, indicating the mandatory nature of penalties under Rule 96ZO for default in payment. The Commissioner (Appeals) lacked the authority to entirely set aside penalties when the default in payment was not disputed by the respondents. Consequently, the impugned order setting aside penalties was deemed legally unsustainable.

Final Decision: Considering the case's circumstances and the respondents' payment of the entire duty, a penalty of Rs. 25,000/- each was imposed on the respondents. The appeals of the Revenue were thereby disposed of with this modification.