2018 (3) TMI 327 - AT - Central Excise

Default in monthly payment of duty - whether the appellant company is liable for penalty under Rule 25 and Director of the company liable for penalty under Rule 26 of Central Excise Rules, for default in monthly payment of duty under Rule 8 of Central Excise Rules, 2002 when the appellant company have paid the duty though belatedly but along with interest? - Held that - The liability of the non-payment of duty was declared in the ER1 return for the month of November, 2010 therefore this is not a case of suppression of facts or malafide intentions on the part of the appellant with intention to evade duty - the appellant have paid entire duty though belatedly along with interest - there is no reason to impose penalty on the appellant company or penalty under Rule 26 on the director of the company. However, by making delayed payment appellant have contravened provisions - appellant liable for penalty u/r 27. Appeal allowed in part.

Summary

Issues: Liability for penalty under Rule 25 and Rule 26 of Central Excise Rules for default in monthly duty payment under Rule 8 of Central Excise Rules, 2002.

Analysis:
1. The appellant company was under scrutiny for delayed payment of monthly duty under Rule 8 of Central Excise Rules, 2002, despite eventually paying the duty along with interest. The main contention was whether penalties under Rule 25 and Rule 26 were applicable.

2. The appellant's counsel argued that since the duty was declared in the ERI return for the month of November 2010, there was no intention to evade payment, and thus no penalties should be imposed. Citing precedents like Commissioner of Central Excise & Customs Vs. Saurashtra Cement Ltd., the counsel emphasized on the absence of suppression of facts.

3. On the contrary, the Revenue's representative supported the impugned order, citing cases like Meghdoot Gramoudyog Sewa Sansthan Vs. Commissioner of Central Excise, Noida. The Revenue contended that penalties were warranted for the delayed payment of duty.

4. After reviewing the arguments and records, the Member(Judicial) concluded that the delayed payment of duty did not involve any malafide intentions or suppression of facts. The appellant had paid the entire duty belatedly along with interest, indicating compliance with the rules. The Member found no grounds for imposing penalties under Rule 25 or Rule 26.

5. However, recognizing the contravention of provisions due to delayed payment, a penalty of &8377;5000 was imposed on the appellant company under Rule 37. The decision partially allowed the appeal of Signapurkar’s Leather House Pvt Ltd and fully allowed the appeal of Shri. Kishore Shankar Signapurkar by setting aside penalties under Rule 25 and Rule 26, respectively.

This detailed analysis highlights the key arguments, legal precedents, and the final decision of the Appellate Tribunal CESTAT MUMBAI regarding the liability for penalties under specific rules of the Central Excise Rules in the context of delayed payment of duty.