2018 (2) TMI 711 - AT - Central Excise

Penalty - duty with interest paid before issuance of SCN - Held that - similar issue decided in the case of CCE & C., AURANGABAD Versus MATSYODARI STEEL & ALLOYS PVT. LTD. 2007 (7) TMI 183 - HIGH COURT BOMBAY , where it was held that no penalty u/s 11AC is imposable in view of payment of duty before issuance of show cause notice - Except cancellation of penalty impugned order is hereby sustained - appeal allowed in part.

Summary

Issues: Appeal against Order-in-Appeal No. SRK/481/RGD/2007 dated 03/12/2007.

In the present case, the main issue was whether the penalty levied was justified, considering that the duty was paid along with interest before the show cause notice was issued. The appellate tribunal examined the facts and relevant legal precedents to determine the applicability of penalty in such circumstances. The tribunal noted that the duty had been paid before the show cause notice, which aligned with the principles established in several key cases, including Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd., 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. The tribunal, following the precedents, concluded that penalty was not leviable in this case. Therefore, the tribunal modified the impugned order and canceled the levy of penalty, while upholding the rest of the impugned order. As a result, the appeals filed by the appellants were partly allowed.

This judgment highlights the importance of timely payment of duty and interest before the issuance of a show cause notice to avoid the imposition of penalties. It underscores the significance of legal precedents in guiding decisions related to penalty imposition in excise matters. The tribunal's decision provides clarity on the circumstances under which penalties may not be levied, based on the established legal principles and previous judgments. Overall, the judgment serves as a reminder of the legal requirements and consequences associated with excise duty payments and penalties in such cases.