2018 (3) TMI 1114 - AT - Central Excise

Penalty u/r 25 or 27 of CER, 2002 - default in monthly payment of duty in terms of Rule 8(3A) of CER 2002 - Held that - this Tribunal time and again held that in case of default in monthly payment of duty in terms of Rule 8(3A) of Central Excise Rules, 2002, it is not the case of clandestine removal or intent to evade payment of duty therefore penalty under Section 11AC or Rule 25 is not imposable - appellant s act of delay in payment of duty does not invite invocation of Section 11AC or Rule 25. Penalty u/r 27 rightly invoked - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Appeal against penalty under Section 11AC imposed by Commissioner(Appeals)
2. Default in monthly payment of duty under Rule 8(3A) of Central Excise Rules, 2002
3. Imposition of penalty under Rule 25 versus Rule 27

Analysis:
1. The Revenue filed an appeal against the penalty imposed under Section 11AC by the Commissioner(Appeals), which was set aside and a penalty of &8377; 5,000/- was imposed instead. The case revolved around the respondent's default in the monthly payment of duty as per Rule 8(3A) of Central Excise Rules, 2002. The Revenue sought to impose a penalty under Rule 25, contrary to the penalty of &8377; 5,000/- imposed under Rule 27.

2. The Ld. Asstt. Commissioner (A.R.) for the Revenue argued that the default in payment led to the clearance of goods without duty payment, warranting penalties under Rule 25. On the other hand, the respondent's representative contended that the case only involved a delay in payment, attracting interest but not a penalty. The respondent relied on various judgments to support their stance.

3. After considering both parties' submissions and reviewing the records, the Tribunal noted that in cases of default in monthly duty payment under Rule 8(3A), where there is no intent to evade duty, penalties under Section 11AC or Rule 25 are not applicable. The Tribunal referenced previous judgments supporting this interpretation. Consequently, the Tribunal upheld the penalty imposed under Rule 27 by the Ld. Commissioner (Appeals) and dismissed the appeal, finding no fault in the impugned order.

This judgment clarifies the distinction between penalties under different rules based on the nature of non-compliance with duty payment obligations, emphasizing the absence of intent to evade duty in cases of delayed payment as a crucial factor in determining the applicable penalty provisions.