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2016 (9) TMI 180 - AT - Central ExciseImposition of penalty - belated payment of duty under Rule 8 of Central Excise Rules - duty liability discharged belatedly with interest in April 2001, December 2001 and July 2002 on their own for the month of March 2001 to November 2001 - Held that - the respondent having discharged the duty liability and interest thereof, before issuance of show-cause notice, provisions of Section 11A(2) of the Central Excise Act, 1944 will apply in its full force that the said provisions clearly amended for issuance of show-cause notice by the lower authorities once the amount of duty liability and interest is discharged by an asseessee. Though we may agree with the findings recorded by the Commissioner (Appeals), the issue is covered by the judgement of the Larger Bench of this Tribunal in the case of Machino Montell (I) Ltd. 2004 (4) TMI 101 - CESTAT, NEW DELHI , at the same time the provisions of Section 11A (2B) of the Central Excise Act, 1944 needs to be considered. Hence, the conclusion reached by the Commissioner (Appeals) that no penalty is imposable is correct albeit the reasoning being erroneous. - Decided against the Revenue
Issues Involved:
Penalty imposed under Rule 25 of Central Excise (No.2) Rules, 2001 read with Section 11AC of the Central Excise Act, 1944 set aside by the first appellate authority. Analysis: Issue 1: Penalty Imposed by Adjudicating Authority The respondent failed to discharge/debit duty liability within the specified period under Rule 8 of the Central Excise Rules, 1944 for the period March 2001 to November 2001. A show-cause notice was issued on 20.10.2003, seeking to impose a penalty on the respondent for belated payment of duty under Rule 8. The adjudicating authority confirmed the demand and imposed penalties under Rule 25 of Central Excise (No.2) Rules, 2001 read with Section 11AC of the Central Excise Act, 1944. Issue 2: Decision of the First Appellate Authority The first appellate authority set aside the imposition of penalty based on the Larger Bench decision in the case of Machino Montell (I) Ltd. 2004 (96) ECC-180 (Tri. LB), which held relevance to the case. The Revenue argued that the penalty was justified as per legal precedents such as the Hon'ble Supreme Court judgment in the case of Zunjarrao Bhikaji Nagarkar 1999 (112) ELT 772 (SC) and the Tribunal decision in Seiko Plast 2003 (156) ELT 1008 (Tri. Mum). Issue 3: Tribunal's Analysis and Decision The Tribunal noted that the respondent had discharged the entire duty liability and interest before the issuance of the show-cause notice. The adjudicating authority did not find any intention to evade duty, and the respondent's claim of timely payment was not disputed. The Tribunal considered the provisions of Section 11A(2) of the Central Excise Act, 1944, which apply when duty liability and interest are paid before the issuance of a show-cause notice. Conclusion: The Tribunal acknowledged the Commissioner (Appeals)'s findings but also considered the provisions of Section 11A (2B) of the Central Excise Act, 1944. While agreeing with the decision to set aside the penalty, the Tribunal found that the conclusion was correct despite some erroneous reasoning. Therefore, the impugned order setting aside the penalty imposed on the respondent was upheld, and the appeal was rejected.
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