1984 (7) TMI 261 - AT - Central Excise

Summary

Issues:
Interpretation of Rule 173Q regarding penalty imposition for contravention of Central Excise Rules with intent to evade duty.

Detailed Analysis:

1. Factual Background:
- The appellants deposited Rs. 1 lakh and Rs. 5,000 under T.R. 6 Challans, with a mistake in mentioning the type of duty on each challan.
- The mistake was rectified before submitting the R.T. 12 return, and the authorities were informed after receiving a letter from the Inspector of Central Excise.

2. Interpretation of Rule 173Q:
- The crux of the case lies in the interpretation of Rule 173Q, which states that a penalty can be imposed for contravention of rules with intent to evade duty.
- The key phrase "with intent to evade payment of duty" is crucial, and the imposition of a penalty requires proof of such intent on the part of the manufacturer.

3. Intent to Evade Duty:
- Although the appellants contravened the rules by clearing goods without sufficient funds in the PLA account, the crucial question is whether there was an intention to evade duty.
- The appellants clarified the mistake promptly, and the authorities acknowledged the error on the R.T. 12 return.

4. Absence of Mala Fide Intent:
- The appellants, a reputable company paying substantial excise duty monthly, had already deposited the correct amount in the government treasury.
- The mistake was acknowledged as unintentional, supported by the Inspector's acknowledgment and subsequent correspondence rectifying the error.

5. Judgment and Conclusion:
- The Tribunal found no evidence of mala fide intent or deliberate evasion of duty by the appellants.
- Considering the genuine mistake and absence of intent to evade duty, the Tribunal set aside the penalty imposed by the Addl. Collector of Central Excise, Meerut, and accepted the appeal.

This detailed analysis highlights the factual background, the interpretation of Rule 173Q, the absence of intent to evade duty, and the Tribunal's decision based on the genuine mistake made by the appellants.