Payment of Penalty, Central Excise

[Pradeep Jain]

Dear Sir,

 We are member of Large Tax payer  Unit (LTU) .We have paid differential Excise duty along with interest. Now department has been insisting to pay penalty  also at the rate of 1 percent of amount of diff. duty under section 11AC to avoid the SCN. According to me , no scn is issued by the department if  differential EC is paid along with interest  . Please advise. Regds Pradeep

Posts / Replies

[Madhukar N Hiregange]

True. Also paying 1 percent penalty accepts that there is fraud, suppression ect.

[Naveed S]

Department insistence appears to be true if the differential excise duty is due to any reason pertaining to fraud, collusion, any wilful mis-statement, suppression of fact or contravention of any provision with intention relating to evasion of excise duty.

The contention made by the departmental officer is correct as in the present case, as the same is duly supported under the rule.

Interestingly, the reasons for payment of differential duty is not mentioned.

 

[S RAMAN]

When the Service Tax is paid with interest no penalty is payable. You can refer a judgement appeared in the same Tax Management India and hence, if demanded prefer an appeal.