2002 (2) TMI 184 - AT - Central Excise

Summary

Issues:
Appeal against duty confirmation, penalty imposition under Section 11AC and Rules 173Q/210, interest payment demand.

Analysis:
The appellants, a registered dealer, received duty paid petroleum products from manufacturers and sold them to customers at cum-duty prices. Due to a price revision, they charged a differential duty from customers but did not pay it to the Central Excise Department, leading to a show cause notice. The Commissioner confirmed the duty of Rs. 55,44,370/- and imposed penalties of equal amount under Section 11AC, Rs. 15,00,000/- under Rules 173Q and 210, and interest under Section 11AC.

The issue of duty demand confirmation was not disputed. However, the challenge was on the penalty imposition under Section 11AC, Rules 173Q/210, and interest charge. The appellants argued that the penalties were not applicable as the amount collected in excess of duty was required to be deposited with the Central Government under Section 11AD, not attracting Section 11AC or Rules 173Q/210. The SDR defended the impugned order without providing new insights.

The Tribunal clarified that penalties under Section 11AC could only be imposed for non-payment or short payment of duty, which was not the case here. The appellants collected excess amounts from buyers but did not short pay duty. Therefore, they were directed to pay only the collected excess amount, with no legal basis for penalties or interest. Consequently, the penalties under Section 11AC and Rules 173Q/210, along with interest demand under Section 11AB, were set aside, while the duty demand confirmation was upheld.

In conclusion, the Tribunal set aside the penalties and interest demands but upheld the duty confirmation. The appeal was disposed of accordingly.