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2017 (8) TMI 997 - AT - Central ExciseInterest - penalty - delayed payment of duty - Held that - the interest for delay of payment of duty is required to be paid under Section 11AB - the interest is to be calculated @ 24% and accordingly intimated to the appellants. Penalty - Held that - the appellant failed to discharge monthly payment of duty under Rule 8 of the CCR, 2002. Thus, the entire transaction is duly recorded in the statutory records. It is already stated that due to delay of discharging duty on monthly basis of Rule 8 of the CER, the appellant is liable to pay the duty alongwith interest as indicated above. Hence, there is no requirement to impose penalty under Rule 25 of the Rules. Appeal allowed - decided partly in favor of appellant.
Issues:
Non-payment of interest for delayed payment of duty and penalty imposed under Rule 25 of the Central Excise Rules, 2002. Analysis: The judgment pertains to a case where the appellants failed to pay Central Excise duty on time due to financial constraints. The appellants argued that there was no malicious intent behind the delay and requested the penalty to be set aside. They also calculated the interest due at ?50,397 and had already paid the same. The issue of interest calculation was discussed in reference to judgments from various High Courts. The Rajasthan High Court held that interest should be charged at a fixed rate to prevent delayed payments from becoming profitable due to lower interest rates. The Gujarat High Court also supported this view. Consequently, the Tribunal directed the interest to be calculated at 24% per annum, in line with the High Court decisions. The Tribunal found that the appellants failed to make monthly duty payments as required by Rule 8 of the Central Excise Rules, leading to the liability to pay duty with interest. As a result, the penalty under Rule 25 was deemed unnecessary. Therefore, the impugned order was modified to calculate interest at 24% per annum and set aside the penalty under Rule 25 of the Central Excise Rules, 2002. The appeal was disposed of accordingly.
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