2018 (11) TMI 75 - AT - Central Excise

Non-imposition of penalty - Revenue has contested only this point as to non-imposition of penalty is incorrect as there is violation of Central Excise Act and Rules made there under - Held that - Respondent company is not in appeal against the said impugned order and we are informed that the respondent has accepted the order and it was stated that they have discharged the entire liability arising out of impugned order. The adjudicating authority was correct in coming to a conclusion that no penal action though proposed in the show cause notice needs to be imposed on the respondent herein - appeal dismissed - decided against Revenue.

Summary

Issues:
1. Imposition of penalty for non-payment of duty.
2. Compliance with Central Excise Act and Rules.
3. Acceptance of Order-in-Original by the respondent.

Analysis:
1. The appeal was filed by the revenue against an Order-in-Original demanding an amount for discharging duty liability belatedly. The respondent had paid the differential amount along with interest before the show cause notice was issued. The adjudicating authority confirmed the demands but did not impose penalties, citing the respondent's explanation of software malfunctioning as the reason for the delay. The revenue contested the non-imposition of penalty, alleging a violation of the Central Excise Act and Rules. However, the Tribunal upheld the adjudicating authority's decision, stating that the reason provided by the respondent was acceptable, and the revenue did not strongly challenge the factual findings. Therefore, the Tribunal rejected the appeal and upheld the Order-in-Original.

2. The adjudicating authority found that the respondent's explanation of software malfunctioning leading to the delay in discharging duty liability at the depot level was a valid reason for not imposing penalties. The Tribunal agreed with this conclusion, emphasizing that the revenue did not dispute these factual findings. The Tribunal noted that the respondent had accepted the Order-in-Original and had discharged the entire liability as per the order. Therefore, the Tribunal found that the impugned order was legally sound and did not require any intervention, leading to the rejection of the appeal.

3. The Tribunal's decision was based on the fact that the respondent had rectified the differential duty payment issue before the show cause notice was issued, and the adjudicating authority had accepted the explanation provided by the respondent regarding software malfunctioning. The Tribunal concluded that the non-imposition of penalties was justified in this case, as the reason for the delay was deemed acceptable. Additionally, the respondent's acceptance of the Order-in-Original and compliance with the liabilities further supported the Tribunal's decision to uphold the original order without any modifications.

This detailed analysis of the judgment highlights the issues of penalty imposition, compliance with regulations, and respondent's acceptance of the order, leading to the Tribunal's decision to reject the appeal and uphold the Order-in-Original.