2012 (8) TMI 858 - AT - Central Excise

Duty demand - Penalty - Suppression of facts - Duty evasion - Held that - in this case it cannot be said that there was mis-statement or suppression of fact with intention to evade duty. As regards limitation, the appellant is not claiming the same and has already paid the duty and is not challenging the demand for duty and interest also. The appellant is seeking only waiver of penalty on the ground that there was no intention to evade payment of duty or suppression of facts or make mis-statements. - Penalty set aside - Decided in favour of assessee.

Summary

Issues:
1. Short payment of duty on imported raw materials due to failure in reversing cenvat credit.
2. Request for waiver of penalty by the appellant based on lack of intention to evade duty.

Analysis:
1. The appellant, engaged in manufacturing plastic master batches, faced a situation where inputs purchased were sometimes sold to their group company, requiring a reversal of cenvat credit. While the appellant paid duty on transaction value during the period in question, discrepancies arose in the case of imported raw materials due to the additional payment of SAD. This led to a short payment of duty amounting to Rs.25,795. The appellant acknowledged the oversight and promptly rectified the issue by reversing the amount with interest. The Tribunal noted that there was no intention to evade duty, and the appellant had paid the duty and interest without contesting the demand.

2. The appellant sought a waiver of penalty, emphasizing that the discrepancy was unintentional and arose from a technical problem in computer programming. The appellant, being a public limited company with bank nominees on the board, was particularly cautious about penalties. Referring to a previous Tribunal decision, the appellant argued that since the duty and interest were paid, and there was no challenge to the same, the penalty should be set aside. After examining the facts and submissions, the Tribunal concurred that there was no misstatement or suppression of facts to evade duty. Considering the circumstances, the Tribunal agreed with the appellant's plea and set aside the penalty, recognizing the absence of any intent to evade payment or provide false information.

This judgment underlines the importance of promptly rectifying inadvertent errors, demonstrating cooperation with authorities, and providing evidence of corrective measures to mitigate penalties in cases of unintentional non-compliance.