2001 (5) TMI 602 - CGOVT - Central Excise

Issues:
Penalty imposition for delayed submission of returns and late payment of tax, waiver of penalty, application of Section 38(3) of the Finance Act, 1979, imposition of penalty under Rule 10A of the FTT Rules, 1979, legal principles for penalty imposition, liability under strict liability offenses, reduction of penalties by original and appellate authorities, setting aside improper and illegal orders, determination of penalty amounts.

Analysis:

1. Penalty Imposition for Delayed Submission of Returns and Late Payment of Tax:
The Assistant Commissioner initially ordered the withdrawal of Show Cause Notices for certain months and imposed penalties for delayed submission of returns and late payment of tax. The Commissioner (A) upheld the original order but reduced the total penalty. The applicants sought waiver of penalty citing staff shortage and night-time flights with no malafide intent. The Government observed errors in the application of Section 38(3) of the Finance Act, 1979, and Rule 10A of the FTT Rules, 1979, leading to the issuance of a suo-moto review SCN.

2. Waiver of Penalty:
The applicants argued that the penalties should be waived as there was no wilful default on their part, and the lapses were due to Air India's handling of the work. They relied on legal principles for penalty imposition, emphasizing their conduct, willingness to pay, and unawareness of the situation. The Government considered the submissions but ultimately determined the penalty amounts based on statutory provisions.

3. Application of Section 38(3) of the Finance Act, 1979:
The Government reviewed the application of Section 38(3) of the Finance Act, 1979, and Rule 10A of the FTT Rules, 1979. It noted the liability to pay penalties for late tax payments and prescribed penalty amounts under the relevant rules. The Government found errors in the original and appellate authorities' decisions and set aside the improper and illegal orders, determining new penalty amounts in compliance with the statute.

4. Imposition of Penalty under Rule 10A of the FTT Rules, 1979:
Regarding the imposition of penalties under Rule 10A of the FTT Rules, 1979, the original authority's decision to impose a lower penalty amount was deemed unjustified. The Government highlighted instances of delays in submitting FTT returns and emphasized the mandatory nature of penalty imposition for such defaults. The Government set a new penalty amount under Rule 10A(1) in addition to the penalty imposed under Section 38(3) of the Finance Act, 1979.

5. Liability under Strict Liability Offenses:
The judgment discussed the nature of strict liability offenses under the Finance Act, 1979, and the Finance Act, 1989, emphasizing that mens rea is not required for penalty imposition in such cases. Citing previous court decisions, the judgment clarified the strict liability nature of offenses related to FTT and IATT, leading to the determination of penalty amounts solely based on the statutory provisions.

6. Reduction of Penalties by Original and Appellate Authorities:
The judgment criticized the original and appellate authorities for reducing the penalties without proper justification and non-application of mind to the statutory provisions. The Government set aside these decisions and determined new penalty amounts, ensuring compliance with the law and rectifying the improper and illegal orders.

In conclusion, the judgment addressed various issues related to penalty imposition, waiver requests, statutory compliance, and the application of legal principles, ultimately setting new penalty amounts in accordance with the relevant laws and regulations.

← Previous Next →