2013 (12) TMI 25 - AT - Central Excise

Notification no. 39/2007 Calculation of Duty on Quarterly basis - Waiver of pre-deposit of Penalty u/s 11AC of CE Act Held hat - If the capital goods on which credit has been taken are removed after being used the manufacturer shall pay an amount equal to CENVAT credit taken on the capital goods reduced by 2.5% on each quarter of the year or part thereof from the date of taking of the CENVAT credit - The appellants while clearing the capital goods calculated duty on quarterly basis - it is not a case of intention to evade payment of duty - thus the penalty imposed u/s 11AC of the Central Excise Act set aside Decided in favour of Assessee.

Summary

Issues: Interpretation of Notification 39/2007-CE(NT), imposition of penalty under section 11AC of the Central Excise Act

The judgment delivered by S S Kang pertains to an application for waiver of pre-deposit of penalty where duty along with interest had already been paid. The appellants challenged the imposition of penalty under section 11AC of the Central Excise Act, concerning the interpretation of Notification 39/2007-CE(NT). The case involved the calculation of duty on capital goods cleared from the factory based on quarterly basis by the appellants, while the Revenue insisted on calculating duty on the actual number of days. The appellants argued that there was no intention to evade payment of duty, as they followed the provisions of the notification. The Revenue contended that since the duty was short paid at the time of clearance, the penalty was justified. The Tribunal found merit in the appellant's contention, setting aside the penalty and allowing the appeal based on the interpretation of the notification and the calculation method of duty on capital goods. The judgment highlighted the importance of adhering to the specific provisions of the notification in determining duty liability and emphasized the absence of intent to evade payment as a crucial factor in penalty imposition under the Central Excise Act.

In summary, the issues involved in the judgment were centered around the correct interpretation of Notification 39/2007-CE(NT) and the subsequent imposition of penalty under section 11AC of the Central Excise Act. The case revolved around the calculation method of duty on capital goods cleared from the factory, with the appellants following a quarterly basis while the Revenue insisted on actual days. The Tribunal ultimately sided with the appellants, emphasizing compliance with notification provisions and the absence of intent to evade payment as key factors in penalty imposition decisions under the Central Excise Act.