2006 (8) TMI 388 - AT - Central Excise

Summary

Issues:
1. Confirmation of duty demand and penalty imposition based on Rule 96ZP(3).
2. Dispute regarding penalty imposition due to a bona fide legal question.
3. Consideration of appeal remand and timely payment of balance amount.

Analysis:
1. The judgment addressed the confirmation of duty demand and penalty imposition under Rule 96ZP(3). The Commissioner confirmed a duty demand of Rs. 31,19,484.60, directing the appellant to pay the balance amount of Rs. 2,72,979.60 immediately. Additionally, a penalty of the same amount was imposed along with interest. The appellant did not dispute the duty demand but challenged the penalty, arguing that the duty confirmation was based on the fixation of annual production capacity by the Commissioner.

2. The appellant contended that the issue of annual capacity of production was under appeal before the Tribunal, indicating a bona fide dispute on a legal question. The Tribunal had remanded the matter previously, recognizing the appellant's challenge. Considering the sub-judice nature of the issue, the Tribunal agreed with the appellant's argument. It was held that no malafide intent could be attributed to the appellant, especially since a significant portion of the duty was paid before adjudication, and the balance was settled promptly after the order.

3. In light of the above, the Tribunal set aside the personal penalty imposed on the appellant, acknowledging the circumstances surrounding the case and the timely payment made by the appellant. However, the duty quantum was confirmed as uncontested, and interest provisions were deemed applicable as per the law. The appeal was disposed of accordingly on 11-8-2006, emphasizing the importance of the legal dispute and the timely compliance by the appellant.