1997 (3) TMI 305 - AT - Central Excise

Summary

Issues:
1. Challenge to imposition of penalty under Rule 173Q for contravention of Central Excise Rules.
2. Interpretation of Rules 173B, 173F, and 173-I regarding payment of correct amount of duty.
3. Determination of whether penalty is justified for non-payment of correct duty amount.

Detailed Analysis:
1. The judgment involves an appeal against the imposition of a penalty under Rule 173Q of the Central Excise Rules. The appellants had filed a classification list for a specific product, declaring the rate of duty and claiming exemption under a notification. The dispute arose when the duty rate was modified, and the appellants paid duty at a lower rate, leading to a demand for differential duty and imposition of a penalty by the adjudicating authority. The appellants contested only the penalty imposition in their appeal.

2. The appellant's counsel argued that the appellants had not contravened Rules 173B, 173F, and 173-I. They maintained that all necessary details were provided in the classification list, duty was paid upon removal of goods, and duty assessment was done correctly. The counsel highlighted the absence of a specific provision for penalty for non-payment of the correct duty amount under the Central Excise Rules. Reference was made to other statutes like the Income Tax Act and the Finance Act to support the argument against the penalty imposition.

3. The Departmental Representative contended that the appellants had indeed contravened Rules 173B, 173F, and 173-I by indicating the wrong rate of duty on their goods, leading to the imposition of the penalty. The representative argued that the penalty was justified and should be upheld.

4. The Tribunal analyzed the submissions and previous judgments to determine the validity of the penalty imposition. It was noted that the appellants' belief in the duty rate was based on a misprint in a relevant tariff publication. Reference was made to a previous Tribunal order and a Madhya Pradesh High Court judgment, which emphasized that penalty cannot be imposed for incorrect duty payment without mens rea or specific provision for such penalty. The Tribunal concluded that the appellants did not contravene the relevant rules to warrant a penalty under Rule 173Q, and therefore, set aside the penalty imposition.

5. Following the precedent set by the Madhya Pradesh High Court judgment, the Tribunal ruled in favor of the appellants, stating that they did not breach any provisions necessitating a penalty under Rule 173Q. Consequently, the penalty imposition was overturned, and the appeal was disposed of in favor of the appellants.