2009 (9) TMI 764 - AT - Central Excise

Summary

Issues:
1. Disallowance of abatement claimed by the manufacturers of MS ingots during shutdown periods.
2. Imposition of interest and penalty for non-payment of duty at the material point of time.

Analysis:
1. The appellants, engaged in manufacturing MS ingots, opted to pay duty monthly under Rule 96ZO(3) of the Central Excise Rules. The dispute arose when show-cause notices were issued proposing to disallow abatements claimed during shutdown periods and demanding duty payment. The Commissioner of Central Excise adjudicated the matter, disallowing abatement for 9 days and confirming a duty demand. However, the issue of interest and penalty was deferred. The impugned order imposed interest and penalty on the ground of non-payment of duty at the material point of time.

2. The key legal provision in question was Rule 96ZO(3), which stipulates consequences for failure to pay the entire amount due by a certain date. The appellants argued that the duty payable was determined only by the Commissioner's order in February 2001, and thus, there was no failure to pay the amount by the specified dates. The Tribunal found merit in this argument, concluding that since the duty amount was finalized only in February 2001, there was no default in payment by the due dates. Consequently, the Tribunal set aside the imposition of interest and penalty, ruling in favor of the appellants.

In conclusion, the Appellate Tribunal, in this case, overturned the imposition of interest and penalty on the manufacturers of MS ingots, as there was no failure to pay the duty amount by the specified dates, as per Rule 96ZO(3). The judgment highlighted the importance of timely determination of duty payable before penalizing for non-payment.