2005 (8) TMI 544 - AT - Central Excise

Summary

Issues:
Reduction of penalty imposed by the Asst. Commissioner on the Respondents for late payment of duty through Cenvat account.

Analysis:
The case involves the appeal by the Revenue against the order of the Commissioner of Central Excise (Appeals) reducing the penalty imposed by the Asst. Commissioner on the Respondents for late payment of duty through Cenvat account. The Respondents, engaged in the manufacture of Tower and Lattice Masts of Iron & Steel, faced a shortage of funds for the period 16-12-2002 to 31-12-2002. Out of the total duty liability of Rs. 55,51,052/-, they debited Rs. 16,85,380/- to Cenvat account and were required to pay the balance of Rs. 38,65,672/- by 5-1-2003. Due to the shortage of funds, they intimated about the delay in payment but eventually paid the balance amount with interest by 4-2-2003.

The Asst. Commissioner adjudicated the matter by withdrawing the facility for payment of duty through Cenvat and imposing a penalty of Rs. 2,00,000/-. However, the Commissioner (Appeals) reduced the penalty to Rs. 5,000/-. The main contention raised by the Respondents was that the penal provision of Rule 8(4) applies only if the assessee defaults in payment of any one installment beyond thirty days from the due date in a financial year.

The undisputed facts reveal that the Respondents paid the due installment by 4-2-2003, within thirty days of the due date. Legal precedents such as CCE v. Genus Overseas Electronics Ltd. and Bilt Industrial Packaging Co. Ltd v. CCE support the view that the date of presentation of the cheque/DD in the bank is deemed to be the date of duty payment. Therefore, the Commissioner (Appeals) was justified in reducing the penalty amount to Rs. 5,000/-.

In conclusion, the Appellate Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal filed by the Revenue, emphasizing that the penalty reduction was appropriate in the circumstances of the case.