2014 (8) TMI 365 - AT - Central Excise

Penalty for electronically Late filing for ER-1 returns - quantum of penalty - Rule 27 of Central Excise Rules, 2002 - Held that - It is observed from the show cause notice dt.27.06.2013 that appellant was called upon to show cause as to why for each months delay penalty should not be separately imposed under Rule 27 of Central Excise Rules, 2002 for contravening the provisions of Rule 12 of Central Excise Rules, 2002. For each months delay, adjudicating authority has imposed certain penalty which do not individually exceed ₹ 5,000/-. It is also observed from Para 3 of the OIO dt.14.08.2013 passed by adjudicating authority that for the period before June 2012 and after February 2013, there is no case of late filing of ER-1 return on the part of the appellant. Appellant was thus taking it for granted that for the period earlier than June 2012 a lenient view was taken by the Revenue for not imposing penalty, as argued by ld.Consultant appearing on behalf of the appellant, and continued with late filing of returns. Therefore, imposition of penalties by the first appellate authority has been correctly upheld. However, looking to the facts and circumstances of this case, penalties imposed upon the appellant for each months delay is reduced to ₹ 1,000/- - Decided partly in favour of assessee.

Summary

Issues:
Imposition of penalties under Rule 27 of Central Excise Rules, 2002 for late filing of ER-1 returns.

Analysis:
The appellant filed a stay application and appeal concerning penalties imposed for late filing of ER-1 returns. The appellant argued that due to server accessibility issues, there was a nominal delay in filing the returns. The maximum penalty under Rule 27 is Rs. 5,000, but the adjudicating authority imposed Rs. 29,500. The appellant cited a previous case to support the argument for a lower penalty. The Revenue contended that the appellant had a habit of late filing and penalties were imposed in a gradual manner, not exceeding Rs. 5,000 per month for each delay.

Upon review, it was observed that penalties were imposed for each month's delay but did not exceed Rs. 5,000 individually. The case-law cited by the appellant was deemed inapplicable as it pertained to a different rule. The adjudicating authority's decision to impose penalties was upheld, but considering the circumstances, the penalties were reduced to Rs. 1,000 per month to ensure justice. The appeal was allowed to the extent of reducing the penalties.

In conclusion, the appellate tribunal addressed the issue of penalties for late filing of ER-1 returns under Rule 27. The arguments of both parties were considered, and while the penalties were upheld, they were reduced to Rs. 1,000 per month for each delay to align with the principles of justice.