2009 (4) TMI 733 - Commissioner - Central Excise

Summary

Issues:
- Failure to make payment through Internet electronically
- Imposition of penalty under Rule 27 of the Central Excise Rules, 2002
- Allegations and contentions raised by the appellant
- Lack of departmental visits for clarification on E-payment
- Deliberate violation of Rule 8(1) and penalty imposition
- Applicability of penalty amount and breach of rules

Analysis:
The judgment involves appeals against Orders-in Original concerning the failure to make electronic payments from April 2007 to March 2008, resulting in penalty proposals under Rule 27 of the Central Excise Rules, 2002. The appellant contested the allegations, citing reasons such as newness to Internet banking, fear of fraud, and lack of support from banks. They argued that non-payment through Internet banking did not indicate intentional violation of Rule 8. Additionally, they highlighted CBEC and Ministry of Finance communications emphasizing E-payment as an additional facility. The appellant claimed no revenue loss due to manual payments and later adoption of electronic payment methods. They criticized the lack of departmental support for E-payment understanding. The appellant argued against deliberate contravention of Rule 8(1) and the adjudicating authority's imposition of maximum penalties without considering their circumstances.

During the Personal Hearing, the appellant's representative emphasized the inability to deposit electronically due to the bank's unpreparedness, requesting penalty waivers. The Commissioner reviewed the case records and acknowledged the absence of disputes regarding duty payment but focused on the failure to honor electronic payments. The adjudicating authority justified penalties based on mandatory electronic payment requirements. However, the Commissioner deemed the non-payment a "technical violation" rather than intentional breach, considering the appellant's genuine reasons. The judgment differentiated between "breach of rules" and "offence," concluding that no penalty was warranted as no deliberate offence occurred. The Commissioner emphasized the Rule's penalty limit of Rs. 5,000, rejecting excessive monthly penalties imposed by the adjudicating authority.

Ultimately, the Commissioner allowed both appeals, overturning the Orders-in Original passed by the Assistant Commissioner, Central Excise, Ratnagiri Division. The decision was based on the lack of deliberate offence, the technical nature of the violation, and the adherence to the penalty limit prescribed by the Rules. The judgment highlighted the importance of considering circumstances and intent while imposing penalties under Rule 27, ensuring fairness and proportionality in penalty assessments.