2006 (10) TMI 346 - AT - Central Excise

Summary

Issues: Delay in payment of duty, contravention of Rule 96ZQ of Central Excise Rules, 1944, imposition of penalty.

Analysis:
1. Delay in Payment of Duty: The appellant failed to pay Central Excise Duty for the periods specified, leading to a delay in payment. The duty for December 1998 was paid in March 1999, and the duty for April 2000 was paid in May 2000. This delay resulted in the issuance of Show-Cause-Notices by the Department for contravention of Rule 96ZQ of Central Excise Rules, 1944.

2. Contravention of Rule 96ZQ: The appellants, engaged in processing textile fabrics, failed to pay duty for the specified periods but eventually paid with interest. The Asstt. Commissioner confirmed the demands and imposed a penalty equivalent to the Central Excise Duty amount. The Commissioner (Appeals) reduced the penalty from Rs. 15,38,710 to Rs. 3,00,000. The appellant cited various decisions in their defense, arguing for the penalty to be set aside due to timely duty payment before the Show-Cause-Notices were issued.

3. Imposition of Penalty: The ld. DR highlighted that penalties should be imposed in cases involving fraud, collusion, willful misstatement, or contravention of provisions with intent to evade duty payment, as per Section 11AC of the Central Excise Act. Despite the appellant's reliance on previous judgments, the Tribunal found repetition of duty payment delays and contravention of Rule 96ZQ. Consequently, the penalty was reduced to Rs. 30,000 from Rs. 3,00,000 considering the duty payment quantum, and the appeal was disposed of accordingly. The Tribunal did not apply the principles from the cited cases due to the specific circumstances of the case.