2013 (12) TMI 1242 - HC - Central Excise

Penalty set aside payment of duty on parts of pressure cookers Held that - The reasoning given by the Tribunal cannot be said to be illegal or unwarranted - The assessee was entitled to exemption by virtue of notification dated 1.3.2002 - The notification was withdrawn on 27.4.2002 Thus, The non payment of duty for some time after withdrawal of exemption will not lead to finding of intentional evasion of duty there was no substantial question of law arises for consideration Decided against Petitioner.

Summary

Issues:
- Appeal against penalty imposed for paying less duty on pressure cooker parts
- Interpretation of tariff plan and notifications regarding duty rates
- Assessment of inadvertent mistake vs. intentional evasion of duty
- Reduction of penalty by Commissioner (Appeals) and subsequent setting aside by Tribunal
- Legal reasoning behind Tribunal's decision
- Existence of substantial question of law for consideration

Analysis:
The judgment pertains to an appeal by the Revenue against the order of the Tribunal setting aside a penalty imposed for paying duty at a concessional rate of 4% on parts of pressure cookers till September 2002. The issue revolves around the interpretation of the tariff plan and notifications related to duty rates. Initially, parts of pressure cookers were subject to duty at 16%, but a notification on 1.3.2002 introduced a concessional rate of 4%. Subsequently, this exemption was withdrawn on 27.4.2002. Despite the withdrawal, the assessee continued to pay duty at the concessional rate until September 2002, leading to the penalty imposition by the Adjudicating Authority.

The Commissioner (Appeals) reduced the penalty to Rs. 1.00 lac, which was further set aside by the Tribunal. The Tribunal found that the failure to pay the correct duty amount was due to an inadvertent mistake and not intentional evasion. The judgment emphasizes that the Tribunal's reasoning was not illegal or unwarranted. It highlights that the assessee was initially entitled to the exemption as per the notification dated 1.3.2002, and the delay in adjusting to the withdrawal of the exemption did not indicate intentional evasion of duty. Consequently, the Tribunal ruled that there was no basis for imposing the penalty.

In the final analysis, the High Court found no substantial question of law that warranted consideration. Therefore, the appeal was dismissed, upholding the Tribunal's decision to set aside the penalty. This judgment underscores the importance of distinguishing between inadvertent errors and deliberate attempts to evade duty, emphasizing the need for a nuanced assessment of the circumstances surrounding duty payment discrepancies to determine the appropriate course of action.