2017 (8) TMI 1100 - AT - Central Excise

Delay in payment of duty - penalty u/r 25(1)(a) of Central Excise Rules 2002 - Held that - there is delay in quarterly payment of duty by the appellant. This is not the case of clandestine removal and non-payment or short payment of duty with intent to evade payment of duty. The appellant have recorded their clearances in their book of accounts and declared in quarterly Returns. Therefore they never had any intention to evade this duty if this is so Rule 25(1)(a) cannot be invoked - reliance placed in the case of M/s. Praweg Conveyors Versus Commissioner of Central Excise Kalyan III 2016 (8) TMI 238 - CESTAT MUMBAI - penalty set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Imposition of penalty under Rule 25(1)(a) of Central Excise Rules, 2002 for delayed payment of duty.

Detailed Analysis:
The case involved the imposition of a penalty under Rule 25(1)(a) of the Central Excise Rules, 2002 due to the delayed quarterly payment of duty by the appellant. The appellant had paid the duty after a delay of 3 months from the due date along with interest. The adjudicating authority imposed a penalty of &8377; 1,50,000, which was upheld by the Ld. Commissioner (Appeals), leading the appellant to appeal to the tribunal.

The appellant's counsel argued that the penalty under Rule 25(1) should not be imposed as it was a case of delayed payment of duty, not non-payment or short payment. The duty payment delays were recorded in the appellant's book of accounts and declared in quarterly returns, indicating no intent to evade duty. The counsel relied on a previous case decision to support this argument.

On the other hand, the revenue's representative reiterated the findings of the impugned order, supporting the penalty imposition.

After considering the submissions and reviewing the records, the tribunal found that the delay in duty payment was not due to evasion but rather a delay in payment. The appellant had recorded clearances in their accounts and declared them in returns, showing no intent to evade duty. The tribunal referenced a previous case to support its decision and emphasized that the penalty under Rule 25(1) could not be invoked in the absence of intent to evade duty. The tribunal also discussed the utilization of Cenvat credit and payment of duty on a consignment basis, aligning with relevant legal judgments.

The tribunal further analyzed the legal provisions related to penalty imposition under Rule 25, emphasizing that the conditions for invoking penalty under Section 11AC of the Central Excise Act were not met in this case. As there was no evidence of fraud, collusion, misstatement, or suppression of facts to evade duty, the tribunal concluded that the penalty under Rule 25 should not be applied. The tribunal distinguished the present case from a cited judgment where duty was not paid as required, highlighting the differences in facts.

Ultimately, based on the legal interpretations and the specific circumstances of the case, the tribunal set aside the penalty imposed under Rule 25(1) and allowed the appeal, ruling that the penalty was not legally justified in this case. The impugned order was set aside, and the appeal was allowed, as pronounced in court.