2005 (1) TMI 170 - AT - Central Excise

Summary

Issues: Validity of penalty imposition and adjustment of abatement claim.

In this case, the Revenue contested the validity of the impugned order, specifically regarding the imposition of penalty amount and adjustment of abatement. The Revenue argued that the penalty should have been equal to the amount of duty paid late by the respondents, citing a legal precedent. They also contended that no adjustment of the abatement claim should be given towards the outstanding dues. On the other hand, the respondents' counsel supported the impugned order. The Tribunal noted that the respondents were under the Compounded Levy Scheme and defaulted in duty payment for a specific period due to financial crisis. The Tribunal highlighted that the imposition of penalty is mandatory but the quantum should consider the circumstances of each case. They emphasized that a universal rule of imposing penalty equal to the delayed duty payment amount cannot be applied. The Tribunal referenced other cases where penalties lower than the excise duty defaulted were upheld. The Tribunal also addressed the claim of remission of duty filed by the respondents, stating that the allowed remission amount must be adjusted towards the outstanding dues. Ultimately, the Tribunal found no illegality in the impugned order, which reduced the penalty and allowed adjustment of the remission amount. As a result, the impugned order was upheld, and the Revenue's appeal was dismissed.