2007 (5) TMI 155 - AT - Central Excise

Penalty Re-fixation of annual capacity by Comm.(A) Compounded Levy Scheme Entire amount of duty was paid before re-fixation of annual capacity No reason to impose penalty and interest

Summary

Issues:
1. Challenge against the re-fixation of annual capacity by the Commissioner of Central Excise.
2. Dispute regarding the payment of duty by the appellant.
3. Interpretation of Rule 96ZP of Central Excise Rules regarding interest and penalty.

Analysis:

Issue 1: The appeal was filed by the Revenue against the order passed by the Commissioner (Appeals) regarding the re-fixation of annual capacity of the mill under the Compounded Levy Scheme. The Tribunal had earlier set aside the order of the Commissioner and remanded the matter for refixation. The Commissioner of Central Excise re-fixed the capacity, which was not challenged in the present appeal. The Commissioner (Appeals) determined the duty payable based on the re-fixation order, and it was found that the appellant had already paid more than the determined duty amount. Therefore, the Tribunal found no infirmity in the impugned order and dismissed the appeal.

Issue 2: The Revenue contended that the appellant did not pay duty on time as per the orders of the Commissioner of Central Excise, making them liable for interest and penalty as per Rule 96ZP of Central Excise Rules. However, it was established that the duty had been paid in full before the re-fixation of annual capacity by the Commissioner of Central Excise. The Commissioner (Appeals) confirmed that the duty liability was less than the amount already deposited by the appellant. As there was no outstanding duty at the time of re-fixation, the Tribunal upheld the decision of the Commissioner (Appeals).

Issue 3: The appellant pointed out a previous dismissal of the Revenue's appeal by the Tribunal against an earlier order passed by the Commissioner (Appeals). It was argued that since the duty had been paid before the re-fixation of annual capacity, there was no merit in the current appeal. The Tribunal considered the facts presented and the absence of any outstanding duty at the time of re-fixation, leading to the dismissal of the appeal.

In conclusion, the Tribunal found no grounds to interfere with the impugned order as the duty had been paid in full before the re-fixation of annual capacity, and the amount determined by the Commissioner (Appeals) was already deposited by the appellant. Therefore, the appeal was dismissed.