2001 (5) TMI 314 - AT - Central Excise

Summary

Issues:
Whether penalty is imposable under Rule 173Q of the Central Excise Rules when duty is deposited before the show cause notice.

Analysis:
The appeal involved the question of whether a penalty could be imposed under Rule 173Q of the Central Excise Rules on M/s. Narendra Products for clearing excisable goods without payment of duty. The appellants argued that they had deposited the duty amount even before the show cause notice was issued, citing various decisions in support of their position. However, the Respondent contended that the removal of goods without payment of duty constituted a contravention of Central Excise Rules, justifying the imposition of a penalty under Rule 173Q(1). The Respondent emphasized that the duty payment after the detection of the violation did not absolve the appellants of liability, referencing a Supreme Court decision that highlighted the responsibility for penalty even in the absence of mens rea.

The Tribunal considered both sides' submissions and noted that the appellants had removed excisable goods over a period of four months without proper documentation or duty payment. The appellants' reliance on previous cases involving different factual scenarios was deemed inapplicable to the present case. The Tribunal emphasized the importance of upholding the trust placed in manufacturers under the Self Removal Procedure and highlighted the significance of timely duty payment to the government exchequer. The Tribunal rejected the appellants' argument that the duty payment after detection of the violation should preclude the imposition of a penalty, emphasizing the need to prevent contraventions of the law.

Moreover, the Tribunal referenced the Supreme Court's interpretation of Rule 173Q in a previous case, emphasizing that the word "liable" indicated responsibility and obligation for penalty, irrespective of the presence of mens rea. The Tribunal concluded that the penalty imposed was reasonable considering the duty amount involved and upheld the penalty of Rs. 15,000, finding no grounds to interfere with the impugned order. Consequently, the appeal was rejected, affirming the imposition of the penalty on the appellants for the contravention of Central Excise Rules.

This detailed analysis of the judgment highlights the legal arguments presented by both parties, the Tribunal's assessment of the factual circumstances, and the application of relevant legal principles to determine the imposition of the penalty under Rule 173Q of the Central Excise Rules.