2009 (7) TMI 398 - AT - Central Excise

Quantum of penalty Revenue s submission is that interest was paid only after Tribunal s order - the fact remains that the interest was not deposited within a period of 30 days of the determination of duty. The benefit of first proviso of Section 11AC can be granted only upon satisfying the condition contained therein. The said proviso requires deposit of duty along with interest payable thereon under Section 11AB and 25% of penalty, within 30 days from the date of communication of the order of the officer determining the said duty. Inasmuch as the interest amount was not deposited within the said period, the benefit of reduced penalty in terms of first proviso, cannot be extended to the appellant. The said order No. A/1686-1688/WZB/AHD/2008, dated 19-8-2008 is accordingly, modified and penalty to the extent of 100% of duty amount is upheld.

Summary

Issues:
1. Recall of order due to non-payment of interest amount within the specified period for reduced penalty.

Analysis:
The Appellate Tribunal received a miscellaneous application from the Revenue requesting the recall of an order passed in the case of M/s. Bhavna Silk Mills. The order had set aside the balance amount of penalty after the appellant claimed to have paid the entire duty, interest, and 25% penalty within 30 days of the communication of the impugned order. However, it was later revealed that the interest amount of Rs. 13,674 was not paid within the stipulated time frame, despite the duty and a portion of the penalty being settled promptly.

The Tribunal noted that the appellant failed to deposit the interest amount within 30 days of the determination of duty, a requirement for availing the benefit of reduced penalty under the first proviso of Section 11AC. This proviso mandates the deposit of duty, interest under Section 11AB, and 25% penalty within the specified period from the date of communication of the duty determination order. Since the interest payment was delayed and made after the Tribunal's order, the appellant did not meet the conditions for the reduced penalty. Consequently, the previous order was modified, and the penalty equivalent to 100% of the duty amount was upheld.

In conclusion, the Tribunal dismissed the miscellaneous application and maintained the penalty at 100% of the duty amount, emphasizing the importance of adhering to the statutory requirements for availing penalty reductions under the relevant provisions of the law. The judgment serves as a reminder of the strict compliance necessary for benefiting from statutory concessions in customs and excise matters.