2010 (10) TMI 283 - AT - Central Excise

Failure to make payment through electronic mode - Penalty - Rule 27 of the Central Excise Rules, 2002 - the default of the respondents are a technical one and for that only penalty be imposed at once and there after they are regularly following the procedure by making the payment through internet banking - Accordingly, the minimum penalty under Rule 27 is to be imposed i.e. only Rs. 2,000/- in both the cases - Accordingly decided in the favour of the assessee

Summary

Issues involved:
1. Stay application for operation of impugned order
2. Imposition of penalty under Rule 27 of Central Excise Rules, 2002
3. Appeal against penalty imposition
4. Cross objections filed by respondent

Analysis:
1. The Revenue filed appeals along with a stay application for the operation of the impugned order. The Stay Applications were found to lack merit and were rejected. Both parties agreed to take up the issue involved in the appeal for final disposal.

2. The case revolved around the respondent's failure to pay excise duty electronically through internet banking as required by Rule 8(1) of the Central Excise Rules 2002. The respondent had paid duty of over 50 Lakhs through PLA in previous financial years but did not transition to electronic payment as mandated. Consequently, a show cause notice was issued, and a penalty of Rs. 5,000/- was imposed on the respondent under Rule 27 of the Central Excise Rules, 2002.

3. The Revenue appealed against the penalty, arguing that a separate penalty of Rs. 5,000/- should be imposed for each default period of 15 months where the duty was not paid electronically. The respondent, on the other hand, sought a reduction in the penalty through cross objections. The Lower Appellate Authority upheld the penalty, leading to further appeals by the Revenue and cross objections by the respondent.

4. During the proceedings, the Revenue reiterated its grounds of appeal, while the respondent's advocate contended that the defaults were technical in nature, and a single penalty should suffice as the respondent had rectified the issue and started making payments through internet banking regularly.

5. After hearing both sides, the tribunal examined the submissions and found that the respondents were willing to comply with the electronic payment requirement but faced technical issues with the bank that prevented electronic payments. Considering this, the tribunal imposed a reduced penalty of Rs. 2,000/- in each case, as the minimum penalty under Rule 27. The appeals by the Revenue and the cross objections by the respondent were disposed of accordingly.