2013 (7) TMI 368 - AT - Central Excise

Reduced payment of penalty u/s 11AC @ 25% - Duty demand was confirmed by the original adjudicating authority along with interest thereon - quantum of interest has not been specified in the said order Held that - Only part payment of duty made and have not made the full amount of duty confirmed, the question of quantifying the interest amount does not arise since the date of payment of duty is not known. Interest is a consequential liability and has to be discharged, whenever there is a default in payment of duty by the due date and, therefore, it cannot be said that in all cases of duty demand, the department should specify the interest amount also, especially when the date of payment of duty on a subsequent period is not known - Therefore, the contention that the interest amount should be computed and should be communicated and, thereafter Assessee will discharge the same within a period of 30 days from the date of such communication and the benefit of reduced penalty of 25% penalty be allowed has no merit - Hon ble apex Court in the case of Rajasthan Spinning & Weaving Mills 2009 (5) TMI 15 - SUPREME COURT OF INDIA held that mandatory penalty under Section 11AC is a punishment for an act of deliberate deception, therefore, the said penalty cannot be reduced subsequently by an appellant authority. Decided against the Assessee.

Summary

Issues:
1. Appeal against duty liability, interest, and penalty.
2. Computation and communication of interest amount.
3. Benefit of reduced penalty under Section 11AC.
4. Applicability of reduced penalty provisions.

Analysis:
1. The appeal challenges the duty liability, interest, and penalty confirmed by the original adjudicating authority. The Tribunal previously set aside the penalty, which was later overturned by the High Court, leading to a fresh consideration of the matter.

2. The appellant argues that interest under Section 11AB was not calculated or communicated by the adjudicating authority, seeking a reduced penalty of 25% from the date of interest communication. Citing a tribunal decision, they claim entitlement to this benefit.

3. The Revenue contends that the demands relate to a period before the reduced penalty provision came into effect, making the 25% penalty reduction inapplicable to the case due to the timeline of the events.

4. The presiding judge, after reviewing both sides' arguments, concludes that interest accrues from the due date of payment until actual payment, even if the specific amount is not detailed in the order. The appellant's obligation to pay interest upon default is emphasized, and the contention that interest must be communicated for penalty reduction is dismissed.

5. The judge highlights that the appellant was already given the opportunity for a reduced penalty in the original order if the penalty and interest were paid within 30 days. Citing legal precedent, it is established that the mandatory penalty under Section 11AC is a consequence of deliberate deception, and cannot be reduced subsequently by an appellate authority.

6. Consequently, the appeal is deemed meritless, and the dismissal of the appeal is upheld based on the legal principles discussed, denying the appellant's request for a reduced penalty and affirming the duty liability, interest, and penalty as initially determined.