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2023 (10) TMI 165 - AT - Central ExciseLevy of penalty under Section 11AC of CentralExcise Act, 1944, Rule 25 and Rule 27 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 - appellant have defaulted the monthly payment of duty within the stipulated time period - subsequent payment of duty from CENVAT Credit - HELD THAT - This is a simplicitor case of delayed payment of admitted excise duty liability on monthly basis. The appellant have never denied the liability and the entire transaction has been recorded in their books. Goods were cleared under invoices, therefore, it is not a case of avoidance or evasion of excise duty. In this fact the proviso to section 11A has no application as the appellant have never intention to evade the payment of duty. The ingredients provided under proviso to section 11A for invoking suppression, fraud mis-declaration etc. do not exist in this case. As per Rule 8 regarding monthly payment of duty also, there is no specific provision for imposition of penalty. There is only a requirement of payment of interest in case of delay. As regard, the utilization of cenvat credit for payment of duty during default period, the same has been held in favour of the assesseein the Indsur Global Limited case by the Hon ble Gujarat High Court, according to which the assessee is allowed to utilize the cenvat credit for payment of excise duty even during the default period. The entire penal provision was invoked on the basis that there is a non-payment of excise duty whereas the fact remains the appellant have already paid the major amount from cenvat credit and a small amount from cash and for the delay, interest was also paid. In this position, there are no penalty in regard to allegation of evasion of duty shall sustain. The penalties under Section 11AC of the Act, Rule 25 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 are not sustainable - there is lapse on the part of the appellant for delayed payment of duty for which penalty under Rule 27 is sufficient - there is admitted position that the appellant have been filing ER-1 returns belatedly which appellant supposed to file by 10th of following month and thereby contravened of provision of Rule 12 of Central Excise 2002. Therefore, for this lapse the appellant is liable to pay the penalty in terms of Rule 27 of Central Excise Rules, 2002. The penalty imposed for Rs. 60,000/- under Rule 27 of Central Excise Rules, 2002 is maintained - Appeal allowed in part.
Issues involved: Whether appellant is liable for penalty under Section 11AC of Central Excise Act, 1944, Rule 25 and Rule 27 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 in a case of delayed payment of excise duty and utilization of cenvat credit for payment during default period.
Summary: The appellant in the present case faced the question of liability for penalties under various sections and rules due to delayed payment of excise duty and subsequent use of cenvat credit for payment during the default period. The appellant's representative argued that there was no malafide intent as the duty was eventually paid, citing legal precedents to support their case. The Revenue representative reiterated the findings of the impugned order. Upon careful consideration, the Tribunal found that this was a straightforward case of delayed payment of admitted excise duty without any intention to evade payment. The appellant had not denied the liability, and all transactions were duly recorded. The Tribunal noted that there was no provision for penalty under Rule 8 for monthly duty payment delays, only requiring interest for delays. Additionally, the utilization of cenvat credit during the default period was permissible based on a judgment by the Hon'ble Gujarat High Court. The Tribunal concluded that the penalties under Section 11AC of the Act, Rule 25 of Central Excise Rules, 2002, and Rule 15(2) of Cenvat Credit Rules, 2004 were not sustainable in this case. However, a penalty under Rule 27 of Central Excise Rules, 2002 was deemed appropriate for the delayed duty payment and late filing of ER-1 returns. As a result, the penalty imposed under Rule 27 was maintained, and the impugned order was modified accordingly. The appeal was partly allowed based on these findings. (Separate Judgement by Judges: None)
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