2007 (6) TMI 460 - AT - Central Excise

Summary

Issues:
Debarring from paying Central Excise duty on installment basis, payment of duty from Cenvat credit account instead of PLA account, demand of duty, interest, and penalty, appeal rejection by Commissioner (Appeals), clarification on duty payment from account current, penalty reduction under Rule 25(a) of Central Excise Rules, 2001.

Analysis:
The case involved the Deputy Commissioner debarring the appellants from paying Central Excise duty on an installment basis for a specific period and directing them to discharge duty liability for each consignment by debiting in account current, as per Rule 8(4) of the Central Excise Rules 2001. The appellants, however, paid duty consignment-wise by debiting from Cenvat credit account instead of the PLA account, leading to the issuance of a show cause notice. The Assistant Commissioner upheld the demand of Rs. 7,13,086/- along with interest and imposed a penalty of Rs. 1,50,000. The Commissioner (Appeals) rejected the appeal, resulting in the appellants filing this appeal before the Tribunal.

During the hearing, it was brought to light that the duty amount had been subsequently paid out of account current, which was confirmed by the ld. DR. The Tribunal clarified that the amount previously paid by debiting from the Cenvat account would be available for utilization, and the payment through PLA was confirmed. Regarding the penalty, the Tribunal found merit in the DR's argument that Rule 25(a) of the Central Excise Rules, 2001 applied since the assessee had removed excisable goods without payment from account current, constituting a contravention of the law. Despite the appellants' argument that they had already faced consequences by forfeiting the fortnightly duty payment facility, the Tribunal deemed a penalty necessary, albeit reducing it to Rs. 25,000 considering the circumstances of the case.

In conclusion, the Tribunal partly allowed the appeal by confirming the duty payment through PLA, reducing the penalty under Rule 25(a) to Rs. 25,000, and addressing the issues raised during the proceedings.