2007 (10) TMI 100 - AT - Central Excise

Bills for clearance were made but not debited the amount in PLA Because of heavy rains in those days, concerned person committed that mistake Entire amount of duty deposited before SCN No allegation of suppression in SCN No malafide intention to remove clandestinely Penalty not justified

Summary

Issues: Non-payment of duty on invoices prepared for clearance of finished goods.

The judgment by the Appellate Tribunal CESTAT, Mumbai dealt with an appeal against an Order-in-appeal regarding the non-payment of duty on invoices prepared by the respondent for clearing their finished goods. The preventive party visiting the factory premises pointed out the issue, leading the respondent to admit and deposit the entire duty amount before the issuance of a show cause notice. The show cause notice did not allege any suppression of facts or willful misstatement to evade duty payment. The main issue revolved around the technical aspect of the respondent not debiting the duty amount in the PLA or recording the clearance in the RG I register. The Commissioner (Appeals) found the explanation given by the respondent plausible, considering adverse weather conditions and operational challenges at the factory. The Commissioner set aside the penalty based on precedents, stating that the duty was paid before the show cause notice, and there was no evidence of mala fide intent on the part of the respondent.

The judgment highlighted that there was no mala fide intention on the part of the appellant to remove goods clandestinely, as acknowledged by the revenue by not including such allegations in the show cause notice. In the absence of fraud, collusion, or misstatement with an intent to evade duty payment, the decision of the Hon'ble High Court of Bombay in a specific case was cited to support the respondent's position. Consequently, the appeal filed by the revenue was rejected, and the cross objection filed by the respondent in support of the order-in-appeal was upheld. The judgment emphasized the absence of any fraudulent intent or deliberate evasion of duty, leading to the dismissal of the revenue's appeal and supporting the respondent's position in the case.