2007 (6) TMI 123 - AT - Central Excise

Cenvat/Modvat - Appellant paid duty consignment-wise by debiting the same form Cenvat credit account instead of PLA account which lead to contravention of the law and accordingly demand were made alongwith penalty - Tribunal allowed the appeal partly

Summary

Issues:
Debarring from paying Central Excise duty on instalment basis, payment of duty from Cenvat credit account, imposition of penalty under Rule 25(a) of Central Excise Rules 2001.

Analysis:
The Deputy Commissioner of Central Excise Solapur Division debarrs the appellants from paying Central Excise duty on instalment basis for a specified period and directs them to discharge duty liability for each consignment by debiting in account current as per Rule 8(4) of the Central Excise Rules 2001. The appellants, however, pay duty consignment-wise by debiting from Cenvat credit account instead of PLA account, leading to a show cause notice. The Assistant Commissioner upholds the demand, imposing a penalty and interest. The Commissioner (Appeals) rejects the appeal, prompting the current appeal.

During the hearing, it is revealed that the appellants have subsequently paid the duty amount out of account current, which is confirmed by the ld. DR after reviewing the PLA debit details. The Tribunal clarifies that the amount previously paid from Cenvat account will be available for utilization, and the payment through PLA is accepted. Regarding the penalty, it is noted that the provisions of Rule 25(a) of the Central Excise Rules, 2001 are applicable as the assessee removed excisable goods without payment from account current, constituting a contravention. The Tribunal acknowledges the prior contravention by the assessee and reduces the penalty to Rs. 25,000 based on the circumstances of the case.

In conclusion, the appeal is partly allowed, with the Tribunal confirming the payment of duty through PLA and reducing the penalty to Rs. 25,000.