2018 (3) TMI 1046 - AT - Central Excise

Interest on delayed payment of duty - penalty u/r 25 of CER - clearance of goods to Depot - Held that - this is not the case of demand of duty evaded by the appellant. As per the fact, due to sale through depot/consignment agency there arising differential duty which the appellant suo motu paid - This is a case of at the most of delay of payment of duty, accordingly only interest is chargeable therefore the demand of interest is upheld - penalty not warranted - appeal allowed in part.

Summary

Issues:
- Appeal against Order-in-Appeal for waiver of interest and penalty due to delay in payment of duty
- Interpretation of differential duty payment on goods sent to own depot
- Applicability of penalty under Rule 25 of the Central Excise Rules, 2002

Analysis:
1. The appeals were filed against the Order-in-Appeal for waiver of interest and penalty concerning the payment of differential duty by the appellant. The appellant had paid differential duty during specific periods, and a show-cause notice was issued for delay in payment of duty, proposing interest and penalty. The Adjudicating Authority confirmed the interest amount and imposed penalties under Rule 25 of the Central Excise Rules, 2002. The appellant, dissatisfied with the Order-in-Original, appealed before the Commissioner (Appeals) and subsequently to the Tribunal.

2. The Vice President of the appellant Company argued that the payment of differential duty was made on goods sent to their depot, where the exact sale price was not known at the time of clearance. It was contended that there was no malafide intention in paying the differential duty, making the impugned order unsustainable. The Revenue, represented by the learned Superintendent, reiterated the findings of the impugned order.

3. Upon careful consideration of the submissions, the Tribunal observed that the case did not involve the evasion of duty by the appellant. The differential duty arose due to sales through depot/consignment agency, which the appellant voluntarily paid. The Tribunal concluded that this was a case of delay in payment of duty, warranting the imposition of interest. However, as there was no malafide intention, the Tribunal held that the penalty under Rule 25 of the Central Excise Rules, 2002 was not sustainable and set it aside. The appeals were partly allowed on these grounds.

4. In the operative portion of the order pronounced in open Court, the Tribunal clarified its decision regarding the demand of interest and the setting aside of the penalty under Rule 25. The judgment highlighted the distinction between delay in payment of duty and duty evasion, leading to the partial allowance of the appeals based on the specific circumstances of the case.