2014 (2) TMI 450 - AT - Central Excise

Duty demand - Imposition of interest and equivalent amount of penalty has been confirmed against them for short payment of ₹ 10/- only - Held that - entire amount of duty along with higher education cess has been already been paid by the appellant and there was a mis-calculation which resulted in short payment of ₹ 10/- only which was also paid by the appellants on their own. In these circumstances, the impugned proceedings were not warranted. Accordingly, impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Short payment of duty under Rule 8(3A) of Central Excise Rules, 2002.

Analysis:
The judgment deals with an appeal and stay application against an order confirming a demand of Rs.2,12,345/- along with interest and penalty due to a short payment of Rs.10/- under Rule 8(3A) of the Central Excise Rules, 2002. The appellants were required to pay duty within 30 days of the month in which it became due, specifically in March 2007. The appellants paid the duty along with Higher Education Cess but miscalculated the amount, resulting in a shortfall of Rs.10/-, which they rectified by paying in June 2007. A show-cause notice was issued under Section 11A of the Central Excise Act, 1944, as a consequence of the short payment, leading to the impugned order.

Upon hearing both sides, the court noted that the entire duty amount along with higher education cess had already been paid by the appellants. The shortfall of Rs.10/- was due to a miscalculation, which the appellants rectified by making the payment themselves. Considering these circumstances, the court found that the impugned proceedings were not justified. Consequently, the impugned order confirming the demand was set aside, and the appeal was allowed. The stay application was also disposed of accordingly.

In conclusion, the judgment highlights the importance of timely and accurate payment of duty under the Central Excise Rules. It emphasizes that inadvertent errors in calculation leading to minor short payments, promptly rectified by the taxpayer, should not warrant unnecessary legal proceedings and penalties. The court's decision in this case reflects a balanced approach, considering the factual circumstances and rectification made by the appellants, ultimately leading to the setting aside of the impugned order.