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2017 (9) TMI 1479 - AT - Central Excise100% EOU - Liability of interest - Section 11AB of the CEA, 1944 - delay in payment of duty - Held that - there is no dispute that the appellant was required to pay duty on DTA Sales from 01.10.2003 to 15.12.2003. Out of this amount of ₹ 69,17,090/- was paid on 18.12.2003. By letter dated 24.06.2004, they requested the Customs Department to debit the balance amount of duty against their outstanding duty liability for the months of October & November, 2003 - the demand of interest u/s 11AB is linked with the determination of duty u/s 11A of the said Act. Therefore, the demand of interest with duty is justified. Penalty - Held that - the appellant deposited the entire duty on DTA Sales. The appellant had discharged the duty liability under Rule 8 of the Central Excise Rules, 2002 on monthly basis - penalty to be set aside. Appeal allowed - decided partly in favor of appellant.
Issues:
Demand of duty on DTA sales, imposition of interest, imposition of penalty, delay in payment of duty, transition of jurisdiction between Excise and Customs Department, justification for demand of interest, enhancement of penalty in Denovo Adjudication, applicability of Section 11AB of the Central Excise Act, 1944, determination of duty under Section 11A, deposit of entire duty on DTA sales, setting aside penalty. Analysis: 1. Demand of Duty on DTA Sales: The case involved a 100% Export Oriented Unit engaged in the manufacture and export of Pet Resin. A Show Cause Notice was issued proposing a demand of duty on the DTA sales. The appellant had paid a portion of the duty but faced a demand for the remaining amount. The Tribunal had earlier remanded the matter for fresh adjudication. 2. Imposition of Interest: The appellant argued that the delay in payment of duty was due to the transition of jurisdiction between the Excise and Customs Department. They contended that there was no intention to evade payment, and thus, imposition of interest was unjustified. However, the Tribunal found that the delay in payment warranted the imposition of interest under Section 11AB of the Central Excise Act, 1944. 3. Imposition of Penalty: The appellant challenged the imposition of penalty under Rule 25 of the Central Excise Rules, 2002. They argued that the penalty amount was enhanced in Denovo Adjudication without proper justification. The Tribunal agreed with the appellant, stating that penalty cannot be increased in Denovo proceedings unless the Revenue files an appeal. The Tribunal referred to a previous case where a similar penalty was set aside. 4. Legal Justification: The Tribunal upheld the demand of duty along with interest, citing the provisions of Section 11AB linked with the determination of duty under Section 11A. However, the penalty was set aside considering that the appellant had already deposited the entire duty on DTA sales and had a consistent record of discharging duty liability. 5. Conclusion: In conclusion, the Tribunal partially allowed the appeal, upholding the demand of duty with interest while setting aside the penalty. The decision was based on the specific circumstances of the case, including the payment history of the appellant and the legal provisions governing duty determination and penalty imposition. This detailed analysis of the judgment highlights the key issues addressed by the Tribunal, the arguments presented by the parties, and the legal reasoning behind the decision rendered in this case.
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