2018 (2) TMI 634 - AT - Central Excise

Penalty - duty paid before issuance of SCN - Held that - it appears that duty is paid before issuing the show cause notice. Then penalty is not leviable - reliance placed in the case of Union of India v. Rajasthan Spinning and Weaving Mills 2009 (5) TMI 15 - SUPREME COURT OF INDIA - penalty set aside - Remaining order is upheld - appeal allowed in part.

Summary

Issues: Appeal against levy of penalty in Order-in-Original dated 31/10/2008.

Analysis:
1. Levy of Penalty: The appellant contested only the levy of penalty, stating that the duty was paid before the show cause notice was issued. The Tribunal noted that duty payment prior to the show cause notice issuance exempts the appellant from penalty, citing various judgments including Union of India v. Rajasthan Spinning and Weaving Mills and Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd.

2. Legal Precedents: The Tribunal referred to several legal precedents like Commissioner of Central Excise v. Galurav Mercantile Ltd., Commissioner of Central Excise v. Matsyodari Steel & Alloys (P) Ltd., and Commissioner of Central Excise Rohtak v. SB Packaging Ltd. to support the exemption of penalty when duty is paid before the show cause notice.

3. Judgment Modification: Based on the established legal principles, the Tribunal modified the impugned order by canceling the penalty while upholding the remaining parts of the order. The appeal was partly allowed, considering the duty payment timeline and relevant legal precedents.

4. Conclusion: The Tribunal's decision highlighted the significance of duty payment before the issuance of a show cause notice in determining the applicability of penalties. By following well-settled legal positions and case laws, the Tribunal provided relief to the appellant by partially allowing the appeal and canceling the penalty.