2017 (1) TMI 14 - AT - Central Excise

Interest - Penalty - Rule 25 of the Central Excise Rules, 2001/2002 - Held that - In my considered view that this unacceptable proposition for a simple reason that the provision of Central Excise Act more specifically, Section 11AB is for demand of interest on the amount of Central Excise duty which have been confirmed and paid by an assessee - Appellant has himself voluntarily discharged the duty liability, that does not mean there would be no interest liability, as provision of Section 11AB were specifically amended to include such a situation, accordingly it is held that the appeal filed by the appellant is liable to be rejected and I do so. In my view the findings of the first appellate authority are correct that there is no dispute that appellant-assessee himself come forward requesting the department to issue show-cause notice, so that they can discharge the duty liability, I find that there is no merit in the appeal - Appeal rejected.

Summary

Issues:
- Appeal by appellant-assessee against demand of interest
- Appeal by Revenue against setting aside penalty by lower authority

Analysis:
1. Demand of Interest:
The appellant-assessee appealed against the order demanding interest, arguing that there was no evidence to establish a delay in payment of Excise duty. The first appellate authority had dropped the penalty but upheld the demand and interest. The appellant's counsel contended that the interest liability should be set aside as there was no intention to evade duty payment. However, the Tribunal held that the appellant voluntarily discharged the duty liability, and thus, interest liability under Section 11AB of the Central Excise Act still applied. The appeal by the appellant was rejected on this ground.

2. Setting Aside Penalty:
The Revenue appealed against the lower authority's decision to set aside the penalty imposed on the appellant. The Departmental Representative argued that there was no bona fide belief on the part of the appellant regarding duty liability, and there was an intention to evade payment. However, the first appellate authority found that the appellant had approached the department voluntarily, seeking to rectify the situation. The Tribunal noted that there was no intention to evade payment of duty, as evidenced by the appellant's proactive approach. The Tribunal agreed with the first appellate authority's findings and rejected the appeal by the Revenue. The Tribunal emphasized that penalty is imposed for intentional evasion, which was not established in this case.

3. Conclusion:
After considering both sides' submissions and the records, the Tribunal upheld the demand and interest on the appellant. The Tribunal also agreed with the first appellate authority's decision to set aside the penalty, as there was no evidence of intentional evasion by the appellant. The Tribunal found that the appellant's proactive approach in rectifying the situation indicated no intention to defraud the government. Therefore, both appeals, by the appellant-assessee and the Revenue, were rejected.