2005 (8) TMI 239 - AT - Central Excise

Summary

Issues:
- Imposition of penalty on the appellants for not bringing duty paid goods to their registered premises before selling to customers
- Applicability of penalty under Rule 173Q(1)(bbb) and Rule 209A of Central Excise Rules, 1944

Analysis:
1. The appeal challenged the penalty imposed on the appellants for not bringing duty paid goods to their registered premises before selling them to customers, which was deemed a violation of the law. The Counsel for the appellant argued that the appellants, as registered dealers, had purchased duty paid goods for trading and sold them to customers in 1997. The customers confirmed receiving dealer invoices as 'coils'. It was highlighted that the appellants regularly filed returns to the authorities, and any alleged violation should be time-barred based on the Show Cause Notice issued on 7-3-2002. Reference was made to a tribunal decision in support of their case.

2. The learned SDR contended that the penalty was justified as registered dealers are obligated to adhere to the law and conditions of registration. Referring to various case laws, the SDR emphasized the need for compliance with procedures outlined by the law. However, upon examining the records, it was noted that the appellants were indeed registered dealers trading in duty paid goods, issuing invoices reflecting paid duty and submitting monthly returns as required. The Show Cause Notice issued in March 2002, specifically for a period in 1997, was considered belated. The provisions of Rule 173Q(1)(bbb) were scrutinized, which allow penalties only if incorrect particulars are entered willfully to facilitate unauthorized duty credit for buyers. As the goods sold were duty paid, and no allegation of passing excessive duty was made, penalties under the mentioned rules were deemed inapplicable. The judgment concluded that since duty paid goods were sold without discrepancies, there was no basis for the appellants to anticipate confiscation, thus allowing the appeals with any consequential relief.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, New Delhi, showcases the arguments presented, legal considerations made, and the ultimate decision reached regarding the imposition of penalties on the appellants.