2007 (4) TMI 594 - AT - Central Excise

Summary

Issues: Challenge against personal penalty imposed under Rule 173Q for alleged duty payment discrepancy.

Analysis:
1. Imposition of Penalty: The appellant challenged the personal penalty of Rs. 27,000 imposed under Rule 173Q. The penalty was based on the allegation that the appellant debited an amount of duty equivalent to 10% of the duty instead of 10% of the value of the input. The Assistant Commissioner confirmed the short payment of duty, which was later set aside by the Commissioner (Appeals) on the grounds of revenue neutrality. However, the Commissioner upheld the penalty, citing potential inconvenience to the department due to such practices.

2. Appellant's Defense: The appellant's advocate argued that the duty discrepancy occurred due to their regular excise clerk being on leave, leading to the incorrect debiting of the duty amount instead of the value of the input. The advocate emphasized that the situation was revenue neutral, with no undue benefit to the appellant. It was clarified that this was an isolated incident and not a regular practice.

3. Judgment: After considering the arguments, the Tribunal found no justification for the penalty imposition. The Tribunal noted that the entire exercise was revenue neutral, and the demand against the appellant was deemed unsustainable. Consequently, the Tribunal set aside the penalty and allowed the appeal, providing consequential relief to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, overturning the penalty imposed under Rule 173Q due to the revenue-neutral nature of the discrepancy and the absence of any undue benefit to the appellant. The judgment highlighted the importance of adherence to excise duty regulations while considering the practical circumstances that may lead to inadvertent errors.