2017 (10) TMI 955 - AT - Central Excise

Penalty u/s 11AC - Failure to make monthly payment of excise duty for the month of May 2011 to August 2011 within the prescribed time limit - Rule 8 read with Rule 8(3A) of CER, 2002 - Held that - this is the case of delayed payment of excise duty and the appellant have declared assessed duty in their monthly return and paid the duty along with interest. Rule 8 itself provide that if there is a delay the assessee is required to pay duty along with interest for the delayed period. The facts of the case that there is no case of suppression of fact even the show cause notice or order does not indicate that there is suppression of fact or malafide intention on the part of the appellant - penalty upheld - appeal allowed.

Summary

Issues:
1. Penalty imposed under Section 11AC for delayed payment of excise duty.
2. Appropriation of amounts not proposed in the show cause notice.
3. Suppression of fact or malafide intention to evade payment of duty.

Analysis:
1. Penalty under Section 11AC: The appellant failed to pay excise duty for May 2011 to August 2011 on time. The Ld. Commissioner upheld the penalty imposed under Section 11AC. However, the Member (Judicial) found that the penalty was not sustainable. The appellant paid the assessed duty along with interest in November 2011, resolving the delayed payment issue. The Member concluded that there was no suppression of fact or malafide intention to evade duty, leading to the setting aside of the penalty under Section 11AC.

2. Appropriation of Amounts: The order-in-original erroneously appropriated amounts not mentioned in the show cause notice. Specifically, an amount of &8377; 44,694/- and &8377; 3,22,891/- were wrongly appropriated. The Member highlighted this error, emphasizing that the duty amounts were not proposed in the show cause notice. Consequently, the penalty imposed under Section 11AC, based on these inappropriate appropriations, was deemed unsustainable.

3. Suppression of Fact or Malafide Intention: The appellant's advocate argued that there was no suppression of fact or malafide intention in the delayed payment of excise duty. The duty not paid was assessed in the monthly returns, and the appellant rectified the non-payment upon receiving the demand notice. The Member concurred with this argument, noting that there was no indication of suppression of fact or malafide intention in the case. This finding further supported the setting aside of the penalty under Section 11AC.

In conclusion, the Appellate Tribunal CESTAT ALLAHABAD, through the judgment delivered by Member (Judicial), allowed the appeal by setting aside the penalty imposed under Section 11AC for the delayed payment of excise duty. The judgment emphasized the importance of adherence to show cause notices and the absence of suppression of fact or malafide intention in the case at hand.