2021 (3) TMI 776 - AT - Central Excise

Levy of penalty - non-filing of the returns namely ER-4, ER-5, ER-6 and ER-7 for the period 2014-15 - HELD THAT - In this case, it is a fact on record that the appellant has not filed the returns namely ER-4, ER-5, ER-6 and ER-7 but on the other hand, there is no Revenue implication for the same. This is only procedural of lapse on the part of the appellant, therefore, leniencies are to be given to the appellant. The consolidated penalty for non-filing of the returns namely ER-4, ER-5, ER-6 and ER-7 for the period 2014-15, the penalty is reduced to ₹ 20,000/- - Appeal allowed in part.

Summary

Issues:
Penalty imposition for non-filing of returns ER-4, ER-5, ER-6, and ER-7 for the period 2014-15.

Analysis:
The appellant appealed against the penalty imposed for not filing returns ER-4, ER-5, ER-6, and ER-7 for the period 2014-15. The case revealed that during an audit in 2019, it was discovered that the appellant had failed to file the mentioned returns, leading to penalties under Rule 12(6) of the Central Excise Rules, 2002, and Rule 15 of the Cenvat Credit Rules, 2004. Initially, the adjudicating authority imposed various penalties, which were later reduced to ?50,000 by the Commissioner (Appeals). The appellant contested this reduction before the tribunal.

The appellant's counsel argued that there was no revenue implication in the matter, urging leniency in imposing the penalty. He cited precedents where penalties on appellants were reduced, emphasizing the need for a similar approach in this case. Conversely, the authorized representative contended that the cited case laws were not applicable and stressed that since the appellant had not filed the returns, penalties were justified as per the rules.

After hearing both parties, the tribunal acknowledged that the appellant had indeed failed to file the specified returns, but noted the absence of revenue implications. Recognizing the lapse as a procedural error, the tribunal deemed it appropriate to show leniency. Consequently, the penalty for non-filing the returns was reduced to ?20,000. The tribunal disposed of the appeal based on this decision.

In conclusion, the tribunal's judgment focused on balancing the procedural lapse of non-filing returns with the absence of revenue implications. By considering the circumstances and arguments presented, the tribunal opted for leniency in imposing the penalty, ultimately reducing it to ?20,000.