2007 (11) TMI 540 - AT - Central Excise

Summary

Issues:
Imposition of penalty under Rule 96ZP(3) of the Central Excise Rules 1944 for delayed discharge of duty liability.

Analysis:
The appellant filed an appeal against a penalty of Rs. 93,025 imposed under Rule 96ZP(3) of the Central Excise Rules 1944 for not discharging their duty liability by the due date. The appellant discharged the duty liability on 12th March 1999 instead of the stipulated 10th March 1999, along with interest. The adjudicating authority imposed a penalty equal to the outstanding duty amount as of the 10th day of the month, as per the rule.

The advocate for the appellant argued that there was no outstanding duty liability at the end of the month, and therefore, no penalty should be imposed. He contended that the delay was not deliberate to evade duty, challenging the Commissioner (Appeals)' finding on the matter. On the other hand, the Departmental Representative supported the findings of the Commissioner (Appeals), emphasizing the liability to pay interest on the outstanding duty amount as of the 10th day of the month.

Upon review, the Tribunal found merit in the appellant's argument. Referring to Rule 96ZP(3), it was noted that the liability to pay penalty is on the outstanding duty amount at the end of the month. Since the duty was discharged on the 12th instead of the 10th, there was no outstanding duty at the end of the month, making the penalty imposition unsustainable. The Tribunal also disagreed with the Commissioner (Appeals)' assertion of deliberate delay to evade duty, deeming it unjustified. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

In conclusion, the Tribunal's decision centered on the interpretation of Rule 96ZP(3) regarding the imposition of penalties for delayed discharge of duty liability, ultimately ruling in favor of the appellant due to the absence of outstanding duty at the end of the month and rejecting the notion of deliberate delay to evade duty.