2009 (7) TMI 950 - AT - Central Excise

Summary

Issues involved: Imposition of penalty u/s 11AC for non-payment of duty and failure to clear goods consignment-wise.

Summary:
1. The appellant challenged the imposition of a penalty of 100% of duty due to financial difficulties under new management. The new management discovered unpaid duty for April 2006, rectified the issue, and paid the duty with interest before the adjudication order. The appellant argued that no penalty should be imposed as there was no intention to evade duty, citing relevant decisions. The SDR argued that a violation of Rule 8(3A) occurred, justifying exemplary penalty. The appellant pointed out that Rule 8(3A) was not applicable during the relevant time.

2. The Tribunal found that the penalty was imposed under Section 11AC but noted that it was not a case of fraud, suppression, or misstatement to evade duty. Referring to previous cases, it was determined that when goods are cleared with proper documentation and the only issue is delayed duty payment, Rule 27 applies, which imposes a maximum penalty of Rs. 5,000. Since the appellant paid all duties and interest without any intention to evade duty, the penalty was reduced to Rs. 5,000.

3. As the appellant paid all duties and interest without any intention to evade duty, the penalty was reduced to Rs. 5,000 under Rule 27. The appeal was rejected except for the modification in the penalty amount.

*(Pronounced in Court on 14-7-2009)*