2006 (11) TMI 445 - AT - Central Excise

Summary

Issues:
Duty payment for August, September, and October 2003; Availing Modvat credit without receiving inputs; Shortages of final product involving Central Excise duty; Imposition of personal penalties; Non-filing of E.R.1 return; Contravention of provisions of Central Excise Rules, 2002.

Analysis:
The appellant, engaged in the manufacture of industrial/lubricating oil, faced scrutiny by Central Excise Officers for non-payment of duty for August, September, and October 2003, along with availing Modvat credit without receiving inputs and shortages of final products incurring Central Excise duty. The Joint Commissioner confirmed duty demand, interest, and imposed personal penalties under Central Excise Rules, including penalties for non-filing of E.R.1 return and contravention of specific rules.

Upon appeal, the Commissioner (Appeals) upheld the duty demand and interest but set aside a personal penalty. The appellant's representative acknowledged non-payment of duty for October 2003 due to financial difficulties, attributing it to cash flow issues despite proper record-keeping and goods clearance with duty payment documents. The representative argued for penalty waiver due to lack of malicious intent.

The tribunal noted the appellant's failure to pay duty for October 2003 despite clearances and compensation received, indicating recovery of duty from buyers but non-deposit with Revenue. Acknowledging financial challenges, the tribunal emphasized the duty-bound obligation to pay duty promptly. While recognizing no malicious intent to evade duty, the tribunal reduced the penalty to Rs. 2,00,000 and confirmed duty payment obligation with interest.

The tribunal upheld the confirmation of small duty amounts and allowed the appeal on specified terms, emphasizing the duty payment responsibility and reducing the penalty amount. The judgment was pronounced on 17-12-2006.