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2014 (12) TMI 580 - AT - Central ExciseCENVAT credit - penalty under Section 11AC - Held that - As the facts of this case are similar to the facts of the case of Solar Chemferts (2011 (6) TMI 640 - CESTAT, MUMBAI), therefore, I hold that penalty under Rule 25 & 26 or under Section 11AC of the Act is not imposable on the respondent, but penalty under Rule 27 is attracted. Therefore, penalty of ₹ 5000/- under Rule 27 of the Central Excise Rules, 2002 is confirmed against the respondent, which shall be paid within 30 days of the communication of this order - Decided partly in favour of Revenue.
Issues: Appeal against dropping of penalty under Rule 8(3A) of Central Excise Rules, 2002.
Analysis: The appeal before the Appellate Tribunal CESTAT MUMBAI pertained to the dropping of penalty against the respondent by the Commissioner (Appeals) in a case where the respondent had defaulted in paying duty as per Rule 8(3A) of the Central Excise Rules, 2002. The respondents had failed to pay duty for the period of September 2005 to November 2005 within the stipulated time frame, leading to initiation of proceedings against them. The Adjudicating Authority confirmed a penalty equal to the duty amount, which was later dropped on appeal by the respondent. The revenue contended that the respondent should be penalized for contravening Rule 8(3A) by not paying duty consignment wise and utilizing the CENVAT credit account. The respondent, on the other hand, argued that since they had paid the duty along with interest, the mandatory penalty under Section 11AC or Rule 25 should not be imposed on them. They cited the case of Solar Chemferts Pvt. Ltd. 2012 (276) ELT 273 to support their position that only a penalty under Rule 27 could be imposed. After hearing both sides and considering the submissions, the Tribunal found the case facts similar to Solar Chemferts and held that penalties under Rule 25 & 26 or under Section 11AC were not applicable to the respondent. However, the Tribunal ruled that a penalty under Rule 27 was warranted. Consequently, a penalty of &8377; 5000 under Rule 27 of the Central Excise Rules, 2002 was confirmed against the respondent, with a directive to pay within 30 days of receiving the order. In conclusion, the appeal was disposed of with the imposition of a penalty under Rule 27, as determined by the Tribunal based on the specific circumstances and legal provisions applicable to the case.
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