1989 (10) TMI 154 - AT - Central Excise

Summary

Issues:
- Appeal against penalty under Rule 173Q for alleged violations of Central Excise Rules.
- Contravention of Central Excise law leading to penalty imposition.
- Interpretation of Rule 173Q for penalty imposition.
- Application of penalty provisions for delayed payment of duty.
- Consideration of mala fide intention or attempt to evade duty.
- Relevance of specific Central Excise Rules in penalty imposition.
- Bona fides of the appellant in declaration and payment of duty.
- Applicability of residuary Rule 210 in the absence of specific penalty provision.

Analysis:

The judgment involves an appeal by M/s Topaz Commerce Limited against a penalty imposed under Rule 173Q for alleged violations of Central Excise Rules, specifically Rules 9(1), 173C, 173F, 173G(1), and 57A. The appeal challenges the order-in-appeal confirming the penalty imposed by the Deputy Collector of Central Excise, Calcutta-I Collectorate. The violation was related to the clearance of goods without paying Central Excise duty, leading to a penalty of Rs. 1000 under Rule 173Q.

The appellant cleared goods availing full exemption in duty but later exceeded the threshold for exemption eligibility, necessitating duty payment for past clearances. The Deputy Collector found the contravention established but imposed a nominal penalty considering the appellant's status as a Small Scale Industry (S.S.I.) unit. The Collector (Appeals) upheld this decision, emphasizing the contravention and the nominal penalty despite the duty amount involved.

In the appeal before the Tribunal, the appellant argued against penalty imposition, citing lack of intent to evade duty and contending that no deliberate violation of Central Excise Law occurred. They highlighted the Supreme Court's position on penalty imposition for deliberate defiance or contumacious conduct. The appellant's consultant argued that the revised classification list and duty payment demonstrated compliance, negating the need for penalty under Rule 173Q.

The Respondent, however, emphasized the contravention arising from delayed duty payment after becoming ineligible for exemption due to exceeding the value threshold. They argued that the delay from April to November 1987 constituted a violation, irrespective of intent to evade duty. The Respondent contended that Rule 173Q does not require intent to evade duty, focusing on contravention of Central Excise Rules.

The Tribunal found no mala fide intention or attempt to evade duty by the appellant. It noted the absence of contravention of specific Central Excise Rules mentioned in the show cause notice and ruled that Rule 173Q did not apply to the delayed duty payment scenario. The Tribunal agreed with the appellant's consultant that the delay in duty payment was not covered by penal provisions, including the residuary Rule 210. Consequently, the Tribunal accepted the appeal, directing the refund of the penalty paid by the appellant.