2019 (8) TMI 1705 - AT - Central Excise

Seeking restoration of appeal - short payment of excise duty - duty not paid at the time of clearance of goods and was paid after finalisation of the CAS-4 certificate - intent to evade or not - penalty - HELD THAT - It is an admitted fact on record that during initial clearance of excisable goods to the sister unit, the appellant had paid lesser amount of central excise duty due to non-preparation of CAS-4 statement and finalisation of the cost data and that the differential amount was paid subsequently by raising supplementary invoice. The incidence of levy of central excise duty is the production or manufacture of excisable goods. The Central Excise statute mandates that on clearance of the excisable goods from the factory, the assessee was required to discharge the duty liability within the period prescribed under the statute. In this case, admittedly a part of duty liability was discharged by the appellant at the time of clearance of the goods and the remaining amount was paid after finalisation of the CAS-4 certificate. Penalty u/r 25 of CER, 2002 - HELD THAT - The said provisions cannot be invoked against the appellant, in the absence of elements of fraud, collision, wilful misstatement, etc., with intent to evade payment of duty. The impugned order to the extent it confirmed the interest demand on the appellant sustains and the penalty confirmed therein is set aside - Appeal allowed in part.

Summary

Issues Involved:
1. Restoration of appeal for seeking restoration of appeal.
2. Liability to pay interest on differential amount of duty.
3. Imposition of penalty under Rule 25 of the Central Excise Rules 2002.

Analysis:

Issue 1: Restoration of Appeal
The appellant filed a miscellaneous application seeking restoration of appeal that was closed by the Bench for statistical reasons due to a pending issue before the Larger Bench of the Hon'ble Supreme Court. The appellant submitted a judgment by the Larger Bench of the Supreme Court, which clarified the interpretation of Section 11AB regarding the time when duty should be paid. The Tribunal, in light of the settled position of law by the Supreme Court, decided to take up the appeal for hearing. The appeal was restored for further consideration based on the judgment provided.

Issue 2: Liability to Pay Interest on Differential Duty
The appellant had initially paid a lesser amount of central excise duty due to non-preparation of CAS-4 statement and finalization of cost data. The differential amount was paid later by raising a supplementary invoice. The Tribunal referred to the judgment of the Larger Bench of the Supreme Court in a similar case, holding that the appellant is liable to pay interest on the differential amount of duty paid subsequently. The interest demand was confirmed as per the adjudication order based on the settled position of law by the Supreme Court.

Issue 3: Imposition of Penalty under Rule 25
Regarding the imposition of penalty under Rule 25 of the Central Excise Rules 2002, the Tribunal analyzed the provisions of Rule 25 read with Section 11AC of the Central Excise Act 1944. Referring to a case law, the Tribunal concluded that penalty under Rule 25 cannot be invoked in the absence of elements like fraud, collusion, wilful misstatement, or intent to evade payment of duty. The Tribunal set aside the penalty imposed on the appellant as the provisions of Rule 25 were not satisfied based on the absence of the required elements.

In conclusion, the Tribunal partly allowed the appeal in favor of the appellant, confirming the interest demand while setting aside the penalty imposed under Rule 25. The judgment was based on the interpretation of legal provisions and precedents established by the Higher Courts, ensuring a fair and just decision in the matter.