2006 (10) TMI 301 - AT - Central Excise

Summary

Issues:

1. Calculation of penalty under Section 11AC based on payment of duty and interest within 30 days.
2. Interpretation of the proviso to Section 11AC regarding penalty imposition.
3. Review of Commissioner (Appeals) decision on penalty amount.

Analysis:

Issue 1: The appellant contested the penalty imposed under Section 11AC, equivalent to the duty amount, by the Commissioner (Appeals). The appellant argued that the entire duty, interest, and 25% penalty amount were paid within 30 days of the determination of duty. However, the Commissioner (Appeals) claimed that an interest amount was short paid, leading to the full penalty imposition. The appellant submitted a TR6 challan as evidence of payment within the stipulated time frame.

Issue 2: Upon reviewing the TR6 challan, the Tribunal found that the appellant had indeed paid the entire duty, interest, and 25% penalty within the 30-day period. According to the proviso to Section 11AC, the penalty should be limited to 25% if the full amount is paid within the specified time. As a result, the Tribunal held that no further penalty was payable beyond what had already been settled by the appellant.

Issue 3: The Tribunal set aside the Commissioner (Appeals) decision and allowed the appeal, emphasizing that the penalty under Section 11AC should be restricted to 25% of the total duty determined when the payment is made within the prescribed time frame. Consequently, the Tribunal disposed of the stay application, affirming the appellant's compliance with the penalty provisions.

This judgment clarifies the application of Section 11AC penalties based on timely payment of duty, interest, and the specified penalty amount, providing a detailed analysis of the payment evidence and legal provisions to ensure fair adjudication.