2007 (3) TMI 152 - AT - Central Excise

Penalty - Revenue contended that appellant is liable for penalty on the ground that the appellant had not paid the duty on the due dates - Held the revenue contention was not sustained and penalty set aside

Summary

Issues:
- Liability for penalty under Rule 96ZP of Central Excise Rules based on annual capacity determination and duty payment timelines.

Analysis:
The Commissioner (Appeals) ruled that the respondents were not liable for penalties under Rule 96ZP of Central Excise Rules. The revenue contended that the annual capacity of the respondent had been determined by the Commissioner of Central Excise, challenged through an appeal to the Tribunal. The Tribunal ordered a re-fixation by the Commissioner of Central Excise, who adjusted the annual capacity in 2004. The revenue argued that since the capacity remained the same after re-fixation and the duty was not paid on time, penalties should apply. However, it was acknowledged that the duty was paid before the re-fixation. The Tribunal found no fault in the Commissioner's decision post re-fixation, as nothing was outstanding from the respondent after the adjustment. Consequently, all appeals were dismissed.

In summary, the key issue revolved around the challenge to the annual capacity determination by the Commissioner of Central Excise, subsequent re-fixation, and the timing of duty payment by the respondent. The Tribunal's decision hinged on the fact that the duty had been paid before the re-fixation, rendering the penalties unwarranted. The ruling emphasized the importance of timely compliance with duty payments in alignment with capacity adjustments mandated by the authorities.