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1991 (10) TMI 164 - AT - Central Excise
Issues: Leviability of penalty for non-payment of duty despite voluntary payment by the appellant.
Analysis: The appellant was issued a show cause notice for allegedly manufacturing and removing machineries without paying duty. The Collector of Central Excise imposed a penalty of Rs. 30,000, even though the appellant had paid the entire duty before the notice was issued. The appellant's counsel argued that the penalty was not justified as there was no intentional evasion, and the duty was paid voluntarily by the appellant. The counsel cited a previous case where penalty was not imposed when duty was paid voluntarily. The Department, however, argued that the substantial amount of duty was paid only after detection by the authorities, and delayed payment does not absolve the appellant of penalty under the law. The Tribunal considered the submissions and acknowledged that the duty liability was not disputed by the appellant, and the duty was paid voluntarily. The duty was paid after authorities found the clearance of machineries falling under the Central Excise Tariff. The Tribunal noted that the appellant paid further duty voluntarily without any demand from the Department. The Tribunal also observed that the show cause notice did not allege intentional evasion of duty by the appellant. The goods were used inside the factory for manufacturing purposes, not cleared out of the factory without duty payment. The Tribunal found that the non-payment of duty was due to a bona fide misapprehension by the appellant. The appellant's prompt payment of duty, even before the notice, demonstrated good faith. The Tribunal held that a nominal penalty for procedural infractions would suffice, as there was no malafides or intention to evade duty. The penalty was reduced to Rs. 5,000, considering the appellant's actions and lack of intentional wrongdoing. In conclusion, the Tribunal dismissed the appeal but reduced the penalty to Rs. 5,000 due to the appellant's voluntary payment of duty, absence of intentional evasion, and prompt actions to rectify the non-payment of duty.
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