2010 (2) TMI 221 - HC - Central Excise

Penalty- default in duty payment- The respondent deposited the said amount along with interest on 23-3-2007. However, after the deposit of the amount, show cause notice has been issued as to why penalty should not be levied. Tribunal by the impugned order has deleted the penalty. Held that- We do not find any error in the order of the Tribunal, which requires any interference by this Court. The finding of the Tribunal is finding of fact, based on the appreciation of the evidence and the material on record. No substantial question of law arises from the order of the Tribunal. In the result, the appeal fails and is accordingly, dismissed.

Summary

Issues involved:
1. Dishonored cheque for duty deposit
2. Imposition of penalty under Section 11AC
3. Tribunal's decision on penalty deletion

Analysis:
1. Dishonored cheque for duty deposit:
The respondent in this case was required to deposit duty within a specified time frame. The respondent issued a cheque for the deposit, which was later found to be dishonored. Despite this, the respondent claimed to have deposited the amount along with interest after becoming aware of the dishonor. Subsequently, a show cause notice was issued regarding the penalty for non-payment, and the penalty was eventually levied after considering the respondent's reply.

2. Imposition of penalty under Section 11AC:
The Tribunal, in its order, considered the case as a bona fide mistake on the part of the respondent. It noted that the dishonor of the cheque resulted in removal without payment of duty as required under Rule 8. However, the Tribunal opined that this did not amount to an intent to evade payment of duty under Section 11AC. The Tribunal also highlighted the failure of the assessee to ensure that the credit taken in PLA was supported by genuine payment, leading to removal without payment of due duty. Consequently, the penalty imposed was reduced to Rs. 5,000 by the Tribunal.

3. Tribunal's decision on penalty deletion:
The High Court, comprising Rajesh Kumar and Bala Krishna Narayana, JJ., reviewed the Tribunal's decision. They found no error in the Tribunal's order, considering it a factual finding based on evidence and records. The Court concluded that no substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal. The decision upheld the Tribunal's deletion of the penalty based on the facts and circumstances of the case.

In conclusion, the High Court affirmed the Tribunal's decision, emphasizing the factual nature of the findings and the absence of any legal errors warranting interference.