TMI Blog1997 (3) TMI 305X X X X Extracts X X X X X X X X Extracts X X X X ..... solely or principally with machinery of Heading 84.28" and claiming classification under sub-heading 8431.00 of the CETA, 1985. The rate of duty was shown as 12% and exemption was claimed under Notification 175/86, dated 1-3-1986. They filed another classification list effective from 1-4-1986 for the above mentioned product claiming effective rate of duty at 15% together with the benefit of Notification 175/86. The classification lists were approved on 19-12-1986 wherein the rate of duty was modified as 20%. The appellants had cleared the goods during the period from 7-3-1986 to 31-10-1986 and paid duty at the rate of 5% ad valorem (amounting to Rs. 1,72,684.29) against the actual duty liability @ 10% ad valorem (amounting to Rs. 3,45,368.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he duty due and removed the goods only on payment of duty, the provisions of Rule 173F also stand complied with by the appellants. Duty was also assessed on the goods removed, in accordance with the provisions of Rule 173-I and hence even this Rule has not been contravened. He submits that in the absence of any specific provision for penalty for non-payment of correct amount of duty (i.e. duty determined on the basis of correct rate), the penalty is not sustainable and in support of his contention, he refers to the provisions of Section 221 of the Income Tax Act which provides for levy of penalty on default in payment of tax and to similar provisions in the Finance Act, 1989 wherein Section 46(3) provides for imposition of penalty on carrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30-3-1992, the Tribunal accepted the appellants defence that they were led to believe that they were entitled to the benefit of Notification 175/86 in view of the Budget Bulletin issued by the Directorate of Publication and Cencus Central Excise Tariff 1987-88, and set aside the penalty in the complete absence of element of mens rea. In the present case, the appellants belief that the goods attracted 15% duty is based upon misprint in R.K. Jain s Central Excise Tariff. Further, the judgment of the M.P. High Court supra supports the plea of the appellants that penalty cannot be imposed for payment of duty at incorrect rate, in the absence of any specific provision therefor in the CESA, 1944. The M.P. High Court has upheld the contention of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt held that such a consequence could not have been intended, which supports the view that omission to enter the correct price is not a contravention of Rule 173C within the meaning of Rule 173Q. Applying the ratio of this judgment to the present case, we hold that the omission to indicate the correct rate of duty is not a contravention of Rule 173B within the meaning of Rule 173Q. Same is the position with regard to Rules 173F and 173-I. 5. Following the ratio of the M.P. High Court judgment supra, we hold that the appellants have not contravened any of the provisions of Rule 173 so as to warrant imposition of penalty under Rule 173Q and set aside the penalty. The appeal is disposed of in the above terms. - - TaxTMI - TMITax - Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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