2007 (5) TMI 528 - AT - Central Excise

Summary

Issues involved: Appeal against imposition of penalty of Rs. 46,369 under Compounded Levy Scheme; Reduction of penalty amount due to delay in discharging duty liability.

Analysis:

1. Imposition of Penalty under Compounded Levy Scheme:
The appeal was directed against the Order-in-Appeal upholding the penalty of Rs. 46,369 imposed on the appellant under the Compounded Levy Scheme. Despite the appellant's absence, the Tribunal proceeded with the appeal for disposal. The appellant was required to discharge duty liability based on the Annual Capacity of Production. The appellant had contested the duty liability before the Supreme Court, but upon losing, discharged the duty as determined by the authorities. The records indicated that the appellant had partially discharged the duty liability within time and settled the balance subsequently with interest. The Tribunal noted that imposing a penalty equal to the outstanding duty was unwarranted in this case, considering the circumstances. The Tribunal had consistently held that for shorter delays in discharging duty liability, a penalty of Rs. 5,000 would suffice.

2. Reduction of Penalty Amount:
Upon reviewing the facts and circumstances, the Tribunal modified the impugned order, reducing the penalty imposed on the appellant from Rs. 46,369 to Rs. 5,000. The Tribunal found that the penalty amount of Rs. 5,000 was more appropriate given the appellant's compliance with the duty liability, albeit with some delay. Consequently, the appeal was allowed partly, with the penalty amount being significantly reduced to Rs. 5,000, reflecting a more equitable outcome based on the appellant's actions and the Tribunal's established stance on penalty amounts in similar cases.

This detailed analysis of the judgment highlights the issues of penalty imposition under the Compounded Levy Scheme and the subsequent reduction of the penalty amount based on the appellant's compliance and the Tribunal's considerations of justice and precedent.