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2006 (12) TMI 329 - AT - Central ExciseImposition Of Penalty - Delay in payment of duty due to financial crisis - liability to pay interest - HELD THAT:- Since it was obvious that, having disclosed the liability in their returns and pleading financial crisis as the cause of delay, there could not have been any intention to evade the payment of duty. Inference of evasion of duty cannot be drawn from mere delay in making the payment of tax in respect of the transactions already disclosed in the returns which were filed in time. Therefore, the imposition of penalty under the impugned order cannot be sustained. Liability to pay interest, it is clear from the provisions of Rule 8(3) that the appellant was liable to pay interest on the delayed payment at the interest rate stipulated thereunder which was 24% at the relevant time. To the extent that Rule 8(3) of the said rules authorized imposing of interest at Rs. 1000/- per day of delay, this Tribunal has already held in Automotive India (Raipur) Pvt. Ltd., v. CCE, Raipur [2006 (8) TMI 17 - CESTAT, NEW DELHI], that, the words “rupees one thousand per day, whichever is higher” occurring in Rule 8(3) were ultra-vires the provisions of Rule 11AB(1) of the Act and therefore, cannot be enforced. The Tribunal followed the ratio of the decision in Lucid Colloids Ltd. v. Union of India, [2005 (8) TMI 134 - HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR] by which the said phrase was struck down as being beyond the scope of the rule-making power of the Central Government. There is, therefore, no scope for the Revenue authorities to work out the interest liability at the rate of Rs. 1000/- per day and interest, as ordered, is required to be worked out on the basis of Rule 8(3) to the extent that it creates the liability to pay the outstanding amount with interest at the rate of 2% per month (i.e. 24% per annum). The impugned order of penalty is therefore set aside and the order imposing interest under Rule 8(3) is confirmed subject to the above modification. The appeal is accordingly partly allowed.
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