2001 (10) TMI 243 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty for non-payment of duty.
2. Differential duty payment and quarterly basis calculation.
3. Applicability of mandatory penalty under Section 11AC and Rule 173Q.
4. Compliance with duty payment procedures and timing of payments.

Analysis:

Issue 1: Imposition of penalty for non-payment of duty
The Revenue filed an appeal against the Order-in-Appeal, arguing that the Commissioner (Appeals) erred in not imposing a penalty despite non-payment of differential duty. The Revenue contended that failure to furnish details of vehicle transfers resulted in potential revenue loss, justifying penalty imposition. They emphasized that delayed duty payment does not absolve the assessee of penalty liability under the law.

Issue 2: Differential duty payment and quarterly basis calculation
The respondents argued that they paid duty based on the ultimate sale price by the Regional Sales Office (RSO) to the Depot, not strictly on a quarterly basis. They highlighted that duty payment was made after collecting details from all 22 Depots nationwide, leading to payments even after a year in some instances. The Commissioner (Appeals) noted this practice and found no legal basis for quarterly payments, leading to the conclusion that mandatory penalties were not applicable.

Issue 3: Applicability of mandatory penalty under Section 11AC and Rule 173Q
The Commissioner (Appeals) held that mandatory penalties under Section 11AC and Rule 173Q were not imposable due to the voluntary nature of duty payments by the respondents. The judgment cited by the Revenue was deemed irrelevant as the duty payments were made voluntarily after collecting details, rather than quarterly. The preventive officers' visit coincided with the already planned duty debit, indicating no intentional non-compliance.

Issue 4: Compliance with duty payment procedures and timing of payments
Upon reviewing the submissions and records, it was concluded that the procedure of paying differential duty after collecting details from Depots was known to the department. The Commissioner (Appeals) found no fault in the delayed duty payments, as they were made voluntarily and not strictly on a quarterly basis. The judgment upheld the Commissioner's decision, rejecting the Revenue's appeal and confirming the Order-in-Appeal.

In summary, the judgment dismissed the Revenue's appeal, emphasizing the voluntary nature of duty payments and the absence of a legal basis for mandatory penalties due to the unique payment process followed by the respondents.