2018 (5) TMI 541 - AT - Central Excise

Penalty - excise duty with interest paid belatedly - Held that - As the entire duty liability with interest is discharged, appellant need not be visited with the penalty more so in such a situation wherein he is a SSI, hence finding of appellate authority as penalties concerned is correct and needs to be accepted and concurred with - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Appeal No. 42 & 43/2009 regarding excise duty on LLDPE Water Tanks cleared with a brand name "Nandi group" affixed.

Analysis:
The appeal was filed by the revenue against the Order-in-Appeal dated 31.12.2009. Despite the respondent not appearing, the appeal was taken up for disposal due to the narrow compass of the issue. The respondent had cleared final products during July 2007 to March 2008 with a brand name affixed. Upon officers' visit, the respondent acknowledged the non-eligibility for excise exemption due to using the brand name. The duty was paid before the Show Cause Notice, partly in cash and partly through Cenvat Credit. The Adjudicating Authority confirmed the demands with interest and imposed penalties, which were later set aside by the first appellate authority.

The revenue contested the penalty set aside by the Adjudicating Authority, arguing that the respondent did not disclose the clearance of branded goods. It was also claimed that allowing Cenvat Credit for duty discharge would reward non-compliance. However, the Tribunal found that the respondent had discharged the entire duty accepted as payable, possibly due to misinterpretation of the Small Scale Exemption Notification. Being an SSI situated in a designated area, the penalty imposition was deemed unnecessary. The Tribunal agreed with the first appellate authority's decision on penalties and found the respondent's compliance with Section 11A(2B) of the Central Excise Act, 1944 appropriate.

Consequently, the Tribunal upheld the impugned order, stating it was correct and legally sound without any infirmity. The appeal was rejected, and the order was pronounced in court at the conclusion of the hearing.