2012 (3) TMI 431 - HC - Central Excise

Demand of duty with interest and penalty - withdrawal of facility to pay duty on fortnightly basis - Held that - by an order dated 4/12/2002, the assessee s facility to pay duty on fortnightly basis was withdrawn and the assessee was directed to pay duty on each consignment basis. Admittedly, the assessee has not challenged the said order dated 4/12/2002 and in gross violation of the aforesaid order continued to pay excise duty on fortnightly basis by debiting the CENVAT Credit in the RG 23 and PLA accounts - the assessee has neither challenged the order withdrawing the facility to pay duty on fortnightly basis nor paid duty on each consignment basis. No fault can be found with the decision of the Tribunal in confirming the orders passed by the authorities below - appeal dismissed.

Summary

Issues:
1. Justification of duty demand and penalty by the Tribunal.

Analysis:
The appeal questioned whether the Tribunal was correct in upholding the duty demand and penalty imposed by the original order. The case involved a situation where the assessee failed to pay central excise duty on a fortnightly basis as required by law during specific months. Consequently, an order was issued withdrawing the facility for fortnightly payments and directing duty payment on a consignment basis. Subsequently, a duty demand with interest and penalty was confirmed due to non-compliance with the order. The assessee's appeal against this order was initially dismissed by the Commissioner of Central Excise (Appeals) but remanded back for reconsideration by the Tribunal. Ultimately, the duty demand and penalty were reaffirmed in a fresh order by the Commissioner of Central Excise (Appeals), leading to the present appeal before the High Court.

The appellant's counsel argued that previous judgments favored the assessee's position, citing cases where duty payment was made on a consignment basis after challenging the withdrawal of the fortnightly payment facility. However, the High Court found no merit in this argument. It noted that in the current case, the assessee neither contested the withdrawal order nor paid duty on a consignment basis as directed. This crucial distinction rendered the cited judgments inapplicable, as they involved different factual circumstances where duty payments were made as per the revised terms. Consequently, the High Court upheld the Tribunal's decision to confirm the duty demand and penalty imposed by the authorities below.

In conclusion, the High Court dismissed the appeal, ruling that the Tribunal's decision to uphold the duty demand and penalty was justified. The failure of the assessee to challenge the withdrawal of the fortnightly payment facility and comply with the revised duty payment terms led to the rejection of the appeal. No costs were awarded in this matter.