2009 (10) TMI 724 - AT - Central Excise

Summary

Issues:
1. Recovery of Central Excise duty and Education Cess for default in payment.
2. Levying of interest under Rule 8 for delayed payment of duty.
3. Imposition of penalties under Rule 25 and Rule 27 for various violations.

Issue 1: Recovery of Central Excise Duty and Education Cess:
The appellant, engaged in manufacturing excisable goods, failed to pay duty for the period from January to December 2005. The original authority ordered the recovery of duty amounting to Rs. 3,27,708/- along with Education Cess. The appellant contested these demands, leading to an appeal. The Tribunal upheld the duty recovery and Education Cess payment.

Issue 2: Levying of Interest under Rule 8:
The original authority imposed interest at the rate of Rs. 1,000/- per day for the period January to March 2005 and 13% per annum for April to December 2005 under Rule 8. The appellant challenged the daily interest rate. Referring to a High Court judgment, the Tribunal set aside the interest at Rs. 1,000/- per day but upheld the interest at 13% per annum as per Section 11AB of the Act.

Issue 3: Imposition of Penalties under Rule 25 and Rule 27:
Penalties were imposed under Rule 25 for short payment of duty and under Rule 27 for various violations, including non-filing of returns and incorrect details. The Tribunal reduced the penalty under Rule 25 from Rs. 30,000/- to Rs. 10,000/- due to financial hardships but set aside the penalties imposed under Rule 27 as they were beyond the scope of the show cause notice.

In conclusion, the Tribunal disposed of the appeal by affirming the liability to pay interest at 13% per annum on belatedly paid duty and a reduced penalty of Rs. 10,000/- under Rule 25. These payments were directed to be made within 30 days from the date of receipt of the order.