2002 (6) TMI 601 - AT - Central Excise

Summary

Issues:
- Imposition of penalty on M/s Indian Oil Blending Ltd. for short payment of duty on excisable goods cleared during a specific period.

Analysis:
1. Imposition of Penalty: The primary issue in this appeal was whether a penalty should be imposed on M/s Indian Oil Blending Ltd. for the short payment of duty on excisable goods cleared during a specific period. The Appellant argued that they voluntarily paid the duty upon detecting the mistake, and hence, penalty under Section 11AC of the Central Excise Act should not be applicable. They contended that the penalty was unjustified, and even if imposed, it should be reduced significantly. The Department, on the other hand, asserted that the Appellant had suppressed material facts with the intent to evade payment of duty, making Section 11AC applicable.

2. Dispute Resolution: The Tribunal analyzed the submissions from both sides and examined the facts of the case. It was established that the upcountry depot surcharge should have been included in the assessable value of goods cleared to M/s I.O.C. Lubefield but was omitted by the Appellant. The Tribunal noted that the Appellant's claim of paying duty voluntarily was contradicted by documents indicating that the duty was paid only after detection by the Central Excise Department. As the Appellant had not disclosed the omission of the surcharge to the Department, the suppression of facts invoked the provisions of Section 11AC, warranting the imposition of a penalty.

3. Judicial Precedents: The Tribunal distinguished the cases cited by the Appellant's Advocate, emphasizing that the facts in those cases were dissimilar. While the Appellant had rectified the mistake, the penalty was reduced considering the circumstances, especially the fact that the duty was paid before the show-cause notice was issued. Drawing on the decision in Escorts JCB Ltd. v. CCE, the Tribunal found the initially imposed penalty to be excessive and reduced it to Rupees four lakhs to align with the ends of justice. Despite the modification in the penalty amount, the appeal was ultimately rejected.

This detailed analysis highlights the crux of the legal judgment concerning the imposition of a penalty on M/s Indian Oil Blending Ltd. for the short payment of duty on excisable goods, emphasizing the application of Section 11AC and the considerations leading to the reduction of the penalty amount by the Appellate Tribunal CEGAT Kolkata.