2007 (1) TMI 421 - AT - Central Excise

Summary

Issues: Appeal against the Commissioner of Central Excise and Customs (Appeals) order regarding non-payment of Central Excise duty, imposition of penalty, and interest.

Analysis:
1. The appellant, engaged in manufacturing exercisable goods, failed to pay Central Excise duty for the second fortnight of October 2002 on time. The Joint Commissioner issued a show cause notice alleging contravention of Central Excise Rules and imposition of penalty under Section 11AC and interest under Section 11AB.

2. The Commissioner (Appeals) confirmed the duty liability but set aside the penalty based on lack of suppression or misstatement by the appellant and absence of willful intention to evade payment. The appellant had admitted the outstanding duty liability, leading to the non-justification of penalty under Section 11AC and Rule 25 of Central Excise Rules, 2002.

3. The appellant claimed to have paid a portion of the confirmed duty through various modes, totaling Rs. 4,40,074. The Commissioner (Appeals) partially agreed with the duty liability confirmation but found no justification for imposing a penalty due to the lockout and strike affecting the appellant's ability to pay the duty on time and file necessary documents.

4. The Tribunal disagreed with the Commissioner (Appeals) and emphasized that financial constraints cannot excuse non-compliance with Central Excise law. The Tribunal found the penalty for noncompliance necessary, although the quantum could be reduced based on circumstances. Therefore, the matter was remanded back to the Commissioner (Appeals) to determine the penalty amount after considering all aspects and the appellant's conduct in ultimately paying the duty with interest.

5. The Tribunal allowed the appeal, emphasizing the importance of imposing penalties for noncompliance with Central Excise law, even in cases of financial constraints. The decision aimed to ensure that the appellant's conduct and compliance with the law were adequately considered in determining the penalty amount.

This detailed analysis highlights the key legal aspects and reasoning behind the Tribunal's decision in the case.