2006 (8) TMI 52 - AT - Central Excise

Central Excise Equivalent amount of penalty imposed on appellant for the amount of duty liability discharged by them prior to issuance of SCN not upheld Activity of appellant not indicate any intention to evade payment of duty but due to mis-understanding of law they did not debit the amount Debits in RG 23A Part II are as goods debit in PLA

Summary

Issues:
- Disputed duty liability for the period 1-5-2000 to 31-8-2000 on supplementary invoices
- Validity of debits made by the appellant through RG23A, Part II before the show cause notice
- Payment of duty for the period 16-7-2000 to 31-8-2000
- Penalty imposed under Section 11AC for the duty liability
- Interest charged from the appellant

Analysis:

1. Disputed Duty Liability (1-5-2000 to 31-8-2000):
The dispute revolves around the duty liability not discharged by the appellant for the specified period on the supplementary invoices raised. The appellant had debited the excise duty amount through RG23-A, Part II and PLA before the show cause notice was issued. The Commissioner (Appeals) found these debits to be valid, as they were made before the notice, indicating the duty had been paid. The appellant's proactive deposit of the amount, even if belated, was considered in their favor.

2. Validity of Debits through RG23A, Part II:
The appellant argued that the duty payment was made through RG23A, Part II based on the available credit balance during the relevant period. The department contended that duty should have been paid when the supplementary invoices were raised. However, the Tribunal upheld the validity of the debits made by the appellant before the show cause notice, considering them as valid payments.

3. Payment of Duty (16-7-2000 to 31-8-2000):
The appellant discharged the duty liability for this period through debits in RG23A, Part II in March 2001 and September 2001. It was noted that there was no allegation of insufficient balance in the account when the duty was paid. The Tribunal ruled that the duty liability had been discharged, and asking for payment through PLA was deemed unnecessary, given the balance in RG23A, Part II.

4. Penalty Imposed under Section 11AC:
The Tribunal referred to a previous decision where it was held that no penalty is imposable if duty is paid before the show cause notice. The appellant had paid the entire duty amount during the proceedings, indicating their intention to comply. The penalty imposed was reduced significantly to Rs.20,000 considering the circumstances and the appellant's willingness to pay.

5. Interest Charged from the Appellant:
The Tribunal found the appellant liable to pay interest under Section 11AB from the due date of duty liability until the actual payment date. The interest charged was deemed applicable as per the provisions of the law.

In conclusion, the Tribunal partially allowed the appellant's appeal, setting aside the demand for payment through PLA, reducing the penalty, and confirming the interest charged as per the law.