2005 (3) TMI 669 - AT - Central Excise

Summary

Issues:
- Imposition of penalty under Rule 173GG of the Central Excise Rules, 1944 for delayed payment of duty.
- Discretionary powers of authorities to impose penalty below the prescribed limit.
- Interpretation of Rule 173GG(3) regarding penalty imposition.

Analysis:
1. The appellants availed the facility of monthly payment of duty under Rule 173GG of the Central Excise Rules, 1944, where duty had to be paid by the 15th day of the next month. The duty amounts for Aug. '99 and Oct. '99 were paid late, leading to a proposal for a penalty of Rs. 500/- per day for the delays. Both lower authorities upheld the penalty, resulting in the present appeal challenging the penalty imposition.

2. The appellant's counsel argued that authorities had discretionary powers to impose a lesser penalty below the prescribed limit of Rs. 500/- per day. Drawing an analogy with Section 11AC of the Central Excise Act, the counsel contended that imposing a lower penalty was permissible based on the circumstances. In contrast, the JDR argued that Rs. 500/- per day was the minimum penalty under Rule 173GG(3), and since only the minimum penalty was imposed, there was no room for discretion to reduce it.

3. The Tribunal examined Rule 173GG(3), which mandated a penalty of Rs. 500/- per day for default in duty payment, with a proviso setting the maximum penalty limit. The Tribunal noted that the penalty imposed by the lower authorities was the minimum prescribed, limiting any discretion in penalty reduction. Referring to a relevant High Court decision, the Tribunal emphasized that it lacked the authority to lower the penalty below the statutory minimum. Therefore, the Tribunal dismissed the appeal, upholding the penalty imposition.

4. The judgment clarified that the authorities did not possess discretion to reduce penalties below the minimum prescribed by Rule 173GG(3). As the penalty imposed was the statutory minimum, the Tribunal affirmed the lower authorities' decision, citing precedents to support its conclusion. Consequently, the appeal was dismissed, and the impugned order was upheld.