2017 (10) TMI 1222 - AT - Central Excise

Penalty - Duty paid under protest before issaunce of SCN - NCCD - EC - SHEC - whether the penalty is imposable upon the assessee u/r 25 of the CER, 2002, read with section 11AC of the CeEA, 1944 for violation of provisions of Rule 4 and 8 of CER, 2002 and the provision of N/N. 50/2003, with intent to payment of duty - Held that - Hon ble Bombay High Court in the case of CCE Mumbai Vs. Hindustan Petroleum Corporation Ltd. 2016 (12) TMI 1269 - BOMBAY HIGH COURT observed that in case of non-payment or short-payment of duty, penalty gets automatically attracted and authority had no discretion - the issue is relating to National Calamity Contingent Duty (NCCD); Education Cess, and Secondary and Higher Education Cess which was neither created by the Central Excise Act, 1944, nor a subject matter of Ministry of Finance - penalty sustained - appeal dismissed - decided against appellant.

Summary

Issues:
1. Imposition of penalty under Rule 25 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944 for violation of provisions of Rule 4 and 8 of Central Excise Rules, 2002 and the provision of Notification No.50/2003 with intent to payment of duty.

Analysis:
The appeal was filed against Order-in-Original No.15/2015 dated 23.2.2015 for the period April, 2013 to February, 2014. The appellant admitted that a previous Tribunal decision went against them, and the matter was sub-judice before the High Court. The main argument centered around the penalty issue, with the appellant contending that since duty was paid 'under protest' before the show cause notice, no penalty should be levied. However, the respondent argued that the penalty was justified as per the impugned order.

The Tribunal noted that the appellant had paid the demanded amount through PLA under protest, indicating a disagreement with the demand. The appellant sought waiver from the penalty based on this payment method. The Tribunal observed that payment under protest does not fall under Rule 25 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944. Citing relevant case laws, the Tribunal highlighted that non-payment or short-payment of duty automatically attracts penalty, with limited discretion for authorities.

Additionally, the Tribunal referred to specific judgments such as CCE Vs. Viraj Alloys Ltd. and Union of India Vs. Dharmendra Textile Processors to emphasize the statutory provisions regarding payment of duty, interest, and penalty within a specified timeframe to avail reduced penalties. The Tribunal clarified that failure to pay the quantified demand within the stipulated period would result in the full penalty being imposed. The appellant's argument that the duty was exempted was deemed irrelevant as the issue concerned other levies like NCCD, Education Cess, and Secondary and Higher Education Cess.

Ultimately, the Tribunal upheld the impugned order and sustained the penalty of &8377; 92,51,29,143. The appeal was dismissed based on the previous Tribunal decision and the specific circumstances of the case.

In conclusion, the Tribunal's decision was based on the interpretation of relevant provisions, case laws, and the specific facts of the case, leading to the dismissal of the appeal and the sustenance of the penalty imposed.