2018 (1) TMI 1381 - AT - Central Excise

Belated payment of Central Excise Duty - Held that - In Rule 8(3A) there is a word for each month or part thereof part thereof has been defined by the Madras High Court in the case of State of Tamil Nadu vs. P.T.C. Sanghvi & Co. 1985 (2) TMI 246 - MADRAS HIGH COURT where it was mentioned that part thereto means the actual number of days of delay - appellant is liable to pay the penalty amount for belated payment of duty on the basis of the month and the number of the days of delay - appeal allowed - decided in favor of appellant.

Summary

Issues: Interpretation of Rule 8(3A) of the Central Excise Rules, 2002 regarding penalty calculation for belated duty payment.

In this case, the appellant, engaged in manufacturing steel items, paid duty belatedly and the penalty as per Rule 8(3A) of the Central Excise Rules, 2002. The dispute arose as the department demanded the duty amount for the full month, not allowing benefit for the broken period of days in the month. The main issue revolved around the interpretation of the phrase "for each month or part thereof" in Rule 8(3A) concerning penalty calculation for delayed duty payment.

The Tribunal analyzed the interpretation of the phrase "for each month or part thereof" in Rule 8(3A). Referring to judgments by the Madras High Court and the Allahabad High Court, the Tribunal noted that "part thereof" means "the actual number of days of delay." Relying on this explanation, the Tribunal held that the appellant should pay the penalty amount for the belated duty payment based on the month and the number of days of delay. Consequently, the impugned order was set aside, and the appeal was allowed.