2008 (10) TMI 475 - AT - Central Excise

Summary

Issues: Liability for penalty under Rule 209A of the Central Excise Rules, 1944 and liability for interest for delayed payment.

Liability for Penalty under Rule 209A:
The appeal stemmed from Order-in-Appeal No. 732/2001-CE issued by the Commissioner of Customs and Central Excise (Appeals), Bangalore. The Tribunal, in Final Order No. 1332/2005, ruled that the appellants were not liable to pay penalty under Rule 209A of the Central Excise Rules, 1944. This decision was based on a previous Tribunal ruling in the case of Rashtriya Ispat, Nigam Ltd. v. Commissioner of Central Excise, Visakhapatnam, which was upheld by the Hon'ble Apex Court. The Division Bench of the High Court of Karnataka confirmed this portion of the order. However, the High Court remanded the matter back to the Tribunal for consideration of interest for the delayed period. Despite the absence of the appellants during the proceedings, the Tribunal held that they were liable to pay interest for the delayed payment based on the grounds raised by the Commissioner before the High Court. The Tribunal referred to judgments from the High Court of Allahabad and the Tribunal in other cases to support the decision that penalty was not leviable, but interest was applicable.

Liability for Interest for Delayed Payment:
The Tribunal found that the appellants were liable to pay interest for the delayed payment in this case. This decision was based on the grounds of appeal raised by the Commissioner before the High Court of Karnataka. The Tribunal cited the judgment of the High Court of Allahabad in the case of M/s. Pee Aar Steels (P) Ltd. and the Tribunal's judgment in the case of CCE & C, Aurangabad v. Padmashri V.V. Patil S.S.K. Ltd. to support the conclusion that while penalty was not leviable, interest for delayed payment was applicable. The appeal was disposed of with the decision that the appellants were liable for interest for the delayed payment, in line with the judgments referenced.

In conclusion, the Tribunal upheld the decision that the appellants were not liable for penalty under Rule 209A of the Central Excise Rules, 1944 but were liable for interest for the delayed payment based on the grounds raised by the Commissioner before the High Court. The judgment referenced previous rulings and legal precedents to support the decision on both issues.