2016 (9) TMI 1231 - AT - Central Excise

Imposition of penalty - Rule 25 of the Central Excise Rules 2004 - duty evasion - default in payment of duty - one day in an instance and two days in another instance owing to severe financial difficulties - Held that - by respectfully following the decision of Tribunal in the case of M/s Annapurna Earcanal Ltd V/s Commissioner of customs and C.E., Hyderabad 2016 (9) TMI 1113 - CESTAT HYDERABAD , the impugned order to the extent of imposition of penalty under Rule 25(1) of Central Excise Rules 2004 is set aside. - Decided in favour of appellant

Summary

Issues:
1. Default in payment of Central Excise duty beyond the due date.
2. Show Cause Notice issued for non-payment of duty and proposed confiscation.
3. Order by original authority imposing redemption fine, demanding duty, interest, and penalty.
4. Appeal to Commissioner (Appeals) setting aside confiscation but upholding demands.
5. Appeal on the imposability of penalty under Rule 25 of Central Excise Rules 2004.

Analysis:
1. The appellants, manufacturers of Portland Cement, defaulted in paying Central Excise duty beyond the due date for June and July 2012. A Show Cause Notice was issued proposing confiscation of goods cleared without payment of duty and demanding CENVAT duty, interest, and penalty under Rule 25 of Central Excise Rules, 2002.

2. The original authority ordered redemption fine in lieu of confiscation, confirmed the demand of duty, interest, and penalty. The Commissioner (Appeals) set aside confiscation but upheld the demands of duty, interest, and penalties imposed.

3. The appeal focused on the imposability of penalty under Rule 25 of Central Excise Rules 2004. The grounds included the argument that the default was due to financial difficulties without intent to evade duty, and the failure to consider a relevant High Court judgment.

4. The appellant's counsel reiterated the grounds of appeal, citing a Tribunal decision supporting their position. The Department's representative maintained the correctness of duty and interest demands.

5. The Tribunal allowed the appeal, setting aside the imposition of penalty under Rule 25 (1) of Central Excise Rules 2004. The decision was based on a previous case's rationale where financial constraints were considered for delayed duty payments, leading to the penalty being set aside. The impugned order was not interfered with in any other aspect.