2019 (4) TMI 987 - AT - Central Excise

Delay in filing of ER-6 Returns - Rule 9A(3) of CCR, 2004 - period 2012-13 to 2015-16 - HELD THAT - The appellant has committed the lapse of non-filing of ER-6 Returns which is required to be filed under Rule 9A(3) of CCR, 2004. Penalty u/r Rule 15A of the CCR, 2004 - HELD THAT - For violation of CCR, both the authorities have imposed penalties under CER, 2002 which is not permitted by law therefore by invoking Rule 15A of the CCR, 2004 - Penalty under Rule 27 of CER, 2002 and Rule 12(6) of the CER, 2002 set aside - penalty is reduced to ₹ 5000/- only under Rule 15A of the CCR. Appeal allowed in part.

Summary

Issues:
1. Imposition of penalties under CER, 2002 for non-filing of ER-6 Returns under Rule 9A(3) of CCR, 2004.
2. Applicability of penalty provisions under CCR, 2004 and CER, 2002.
3. Correctness of penalties imposed by the authorities.
4. Interpretation of penalty provisions under Rule 15A of CCR, 2004.

Analysis:
The appeal before the Appellate Tribunal CESTAT Bangalore challenged the Commissioner (A)'s order upholding penalties imposed on the appellant for failing to file ER-6 Returns under Rule 9A(3) of CCR, 2004. The appellant, engaged in manufacturing excisable goods, had not submitted the prescribed returns between 2012-2016, resulting in penalties of ?5000 and ?2,40,000. The appellant argued that penalties under CER, 2002 were wrongly imposed, contending that penalties for CCR violations should be under CCR, 2004 itself. The Tribunal noted the lapse in filing returns but found penalties under CER, 2002 inappropriate, citing Rule 15A of CCR, 2004 for general penalties up to ?5000 for rule contraventions. Consequently, the Tribunal set aside the penalties under CER, 2002, reducing the total penalty to ?5000 under Rule 15A of CCR, 2004, partially allowing the appeal.

The main issue revolved around the imposition of penalties under CER, 2002 for non-compliance with CCR, 2004 provisions, specifically Rule 9A(3) regarding ER-6 Returns. The appellant's argument centered on the incorrect application of penalties, asserting that penalties for CCR violations should align with CCR, 2004 provisions, not CER, 2002. The Tribunal agreed, emphasizing Rule 15A of CCR, 2004 for general penalties, leading to the reduction of penalties imposed under CER, 2002.

The Tribunal's analysis focused on the legality of penalties imposed by the authorities, scrutinizing the penalty provisions under CCR, 2004 and CER, 2002. While the appellant acknowledged the filing lapse, the Tribunal deemed penalties under CER, 2002 as impermissible for CCR violations. By invoking Rule 15A of CCR, 2004, the Tribunal rectified the penalties, aligning them with the appropriate rule and reducing the penalty amount significantly.

Furthermore, the Tribunal delved into the interpretation of penalty provisions under Rule 15A of CCR, 2004. By referencing this rule, the Tribunal clarified that penalties for contraventions where no specific penalty is provided should adhere to Rule 15A, limiting penalties to ?5000. This interpretation guided the Tribunal in rectifying the penalties imposed under CER, 2002, ensuring compliance with the correct penalty framework and justifying the penalty reduction to ?5000 under Rule 15A of CCR, 2004.