2014 (8) TMI 965 - AT - Central Excise

Failure to file monthly returns - penal action under Rule 27 of the Central Excise Rules, 2002 - Held that - It is urged by the appellant that new system of filing (e. filing) was introduced from April/May, 2010. The unit is located in remote area, subjected to frequent power cuts and poor connectivity of internet connection. Thus some delay resulted in filing returns, which is neither deliberate, nor there is any deliberate defiance of law. I find that returns have been filed regularly, and delay varies from one day to 18 or 20 days, except in two cases when delay is of 43 days and 30 days. Under the facts and circumstances, no case of deliberate disobedience of provisions of law is made out. - Decided in favour of assessee.

Summary

Issues Involved:
Late filing of monthly returns under Central Excise Rules, 2002 and CENVAT Credit Rules, 2004 leading to penalty imposition.

Analysis:

Issue 1: Late Filing of Monthly Returns
The appellant, M/s. Graintoch Industries Ltd., failed to file their returns within the stipulated time period as required by the Central Excise Rules, 2002 and CENVAT Credit Rules, 2004. The appellant's returns for various months from March 2010 to April 2013 were delayed ranging from 1 day to 43 days. The contravention of the rules made the appellant liable for penal action under Rule 27 of the Central Excise Rules, 2002.

Issue 2: Show Cause Notice and Penalty Imposition
A show cause notice was issued to the appellant on 24-7-2013, proposing penalties under Rule 27 of the Central Excise Rules, 2002 for late filing of returns for each month. The notice was adjudicated, and a penalty of &8377; 24,500/- was imposed on the appellant for late filing of monthly returns for various months. The appellant, being aggrieved by this decision, appealed before the Tribunal.

Issue 3: Appellant's Arguments and Tribunal's Decision
The appellant argued that the delay in filing returns was due to the introduction of a new filing system from April/May 2010, coupled with challenges such as the unit's remote location, frequent power cuts, and poor internet connectivity. The appellant contended that the delays were not deliberate and did not amount to deliberate disobedience of the law. The Tribunal considered the circumstances, noted that returns were filed regularly with delays mostly ranging from 1 to 20 days, except for a few instances of longer delays. The Tribunal found no evidence of deliberate defiance of the law and allowed the appeal, setting aside the impugned order imposing penalties.

Conclusion:
The Tribunal, after considering the appellant's explanations and the circumstances surrounding the late filing of returns, concluded that there was no deliberate disobedience of the law. The penalties imposed under Rule 27 of the Central Excise Rules, 2002 were set aside, and the appeal was allowed in favor of the appellant.