2013 (4) TMI 559 - AT - Central Excise

Interest and Penalty on Payment of differential duty after the dates of clearance of the impugned goods Held that in the case of M/s. SKF India (2009 (7) TMI 6 - SUPREME COURT), the Hon ble Supreme Court has waived the imposition of penalty as the cases dealt in thereunder were cases of short-payment of duty which was completely unintended and without any element of deceit etc. The present cases are not of the same category as the appellants were clearly aware of the subsequent cost calculation as per CAS-4 standard for the relevant years but did not voluntarily pay the duty amounts till the department detected the short-payment and advised them to pay the differential duty. - Hence, we are of the view that imposition of some amount of penalty is justified in both these cases.

Summary

Issues:
1. Extension of stay granted earlier
2. Payment of differential duty
3. Imposition of penalty

Extension of Stay Granted Earlier:
The Appellate Tribunal held that the miscellaneous applications filed for an extension of stay granted earlier were not required to be allowed. The issue involved in both cases was deemed settled by a previous decision of the Hon'ble Supreme Court in a specific case. Therefore, the appeals themselves were taken up for hearing and disposal, leading to the dismissal of both miscellaneous applications.

Payment of Differential Duty:
In both cases, the appellants had paid differential duty much after the dates of clearance of the impugned goods. Initially, duty was paid based on the previous year's costing calculation. Subsequently, the costing was done for the relevant years following the CAS-4 standard, and the differential duty amounts were paid before the issuance of show-cause notices but after detection by the department. The Tribunal noted that interest on the differential duty paid through supplementary invoices at a later period needed confirmation based on a Supreme Court decision. While the Supreme Court had waived penalty in a similar case, the present cases differed as the appellants were aware of the subsequent cost calculation but did not pay the duty until the department detected the shortfall. Therefore, the Tribunal found that some penalty imposition was justified in both cases.

Imposition of Penalty:
Regarding the specific appeals, in Appeal No. E/338/2008, the differential duty was Rs. 1,03,56,603, with an interest amount of Rs. 32,58,591, and a penalty of Rs. 3,30,000 imposed. The Tribunal deemed the penalty reasonable considering the duty and interest amounts, warranting no reduction. In Appeal No. E/737/2007, the differential amount was Rs. 83,22,142, with an interest amount of Rs. 47,81,097, and a penalty of Rs. 10 lakhs imposed. The Tribunal decided to reduce the penalty amount in this case from Rs. 10 lakhs to Rs. 4 lakhs, stating that justice would be served with the reduced penalty.

Conclusion:
Both appeals were dismissed, except for the reduction in the penalty amount in one case as specified above. The Tribunal's decision emphasized the importance of timely payment of duties and the justifiable imposition of penalties in cases where duty payments were delayed despite awareness of the correct calculations.