2008 (3) TMI 236 - AT - Central Excise

Bona fide belief that activity of manufacturing Wooden crates, doesn t amounts to manufacture entire duty has since been paid - in the absence of any material showing any positive intention to evade duty or fraud, collusion, etc., imposition of penalty was not justified - Delay in filing appeal because of negligence of the lawyer - it will not be fair to dismiss the appeal at the threshold on the ground of limitation delay condoned

Summary

Issues involved: Condonation of delay in filing the appeal, Merits of the case regarding duty payment and penalty imposition.

Condonation of delay in filing the appeal: The appellant initially faced delay in filing the appeal before the Tribunal due to defects in the memo of appeal. Despite being given a chance to rectify the defects, the appellant failed to do so in a timely manner. The appellant attributed this delay to the negligence of the previous advocate engaged by them. The Tribunal considered the circumstances and decided to condone the delay, noting that it would be unfair to dismiss the appeal solely on the ground of limitation due to the lawyer's negligence. The Tribunal emphasized that the appellant should not suffer due to the lawyer's failure to rectify the defects promptly.

Merits of the case regarding duty payment and penalty imposition: The appellant did not dispute the liability to pay duty on the goods, which were wooden crates manufactured for home consumption. The appellant argued that they believed the activities did not amount to manufacturing subject to excise duty. The duty amount was paid in full, and there was no intention to evade duty. The Tribunal acknowledged the duty payment but noted a lack of proof for a specific portion of the duty amount. Despite this, the Tribunal did not delve into the payment proof issue as the duty demand itself was not disputed. Regarding the penalty imposition of Rs. 1 lakh, the Tribunal found that there was no evidence of any positive intention on the part of the appellant, a government undertaking, to evade duty or engage in fraud. Therefore, the Tribunal set aside the penalty imposed by the Commissioner, as it was deemed unjustified.

In conclusion, the Tribunal dismissed the appeal subject to the modification in the Commissioner's order regarding the penalty imposition. The decision highlighted the importance of considering the circumstances surrounding the delay in filing the appeal and the lack of evidence supporting penalty imposition in cases where there was no intention to evade duty or engage in fraudulent activities.