TMI Blog2010 (11) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, were heard together and are being disposed of by this common order. 3. The assessees are manufacturers of steel ingots classifiable under sub-heading 7206.90 of the Central Excise Tariff Act, 1985. They were availing the facility of paying central excise duty on fortnightly basis in respect of goods removed from their factory as per Rule 8 of the Central Excise Rules, 2002 for the period December 2002 and January 2003. Pursuant to the scrutiny of ER-1 returns submitted by the assessees for the said months, it was revealed that the assessees had not discharged the duty liability for the second fortnight of December 2002 and January 2003 which they were required to discharge by 5th of January and 5th of February respectively. The total central excise duty so defaulted was Rs. 10,30,959/-, out of which some of Rs. 8,22,270/- pertain to December, 2002 and the balance pertain to January 2003. In fact, the said amount was not paid to the Government, though it was collected by the assessees from their buyers. On that ground, a show cause notice dated 30-12-2003 came to be issued to the assessee, which was contested by the assessees. 4. It is the case of the assessee th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the absence thereof the authorities below would not have been imposed the penalty. If at all, any default is said to be committed, the penalty could have been at the most under Rule 27 of the said rules. Reliance is placed in the decision of the Tribunal in the matter of Kitply Industries Ltd. v. CC CE, Meerut-II reported in 2009 (243) E.L.T. 209 (Tri. -Del.). 8. On the other hand, the DR has sought to challenge the impugned order in relation to the reduction in the penalty amount on the ground that the assessee inspite of having collected the duty amount from their buyers had not paid the same to the Government and this apparently disclosed intention to evade the payment of duty and, therefore, according to the DR the authority below was not justified in reducing the penalty which was imposed by the adjudicating authority. In that regard, attention is drawn to the findings arrived at by the adjudicating authority in its order. 9. The adjudicating authority after hearing the parties had arrived at the finding that the assessee s contention that their financial position was deteriorated and as such they could not deposit the duty amount was not tenable as the assessee had col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice, the above quoted para was proceeded by the facts of the case which revealed that pursuant to the scrutiny of AR-1 return for the months of December 2002 and January 2003 it was observed by the department that the assesees had not discharged the duty liability for second fortnight of December 2002 and January 2003 even though they were required to discharge such duty liability by 5th January and 5th of February 2003 respectively and consequently they had defaulted in payment of duty to the tune of Rs. 10,30,959/-. It was also stated that the assessee had not paid the said amount even though they had collected the same from their buyers. Obviously, therefore, the basic facts which were necessary to disclose the intention of the assessee to evade the payment of duty so as to warrant imposition of penalty were clearly stated in the show cause notice. 12. In response to the said show cause notice, the assessees filed their reply on 31-3-2004 after payment of the amount demanded under the show cause notice with the specific defence that they could not pay the amount on account of financial difficulties. In other words, the fact that they had collected the duty amount from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or registered person of the warehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c ) or clause (d) has been committed, or [rupees two thousand], whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice . 15. As already stated above the para 3 of the show cause notice apparently refers to the accusation against the assessee regarding the contravention of the provisions of Rule 8 on account of non-payment of duty which was recoverable under Rule 8(3) of the said rules. As already stated above, the above statement in para 3 of the show cause notice was proceeded by the facts ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r each consignment by debit to the account current and in the event of any failure, it shall be deemed that such goods have been cleared without payment of duty and the consequences and penalties as provided in these rules shall follow . 18. Sub-rule (4) of Rule 8 apparently discloses that in case of failure to comply with the requirements of the said rule which results in default by the assessee, the consequences stipulated under the statute are bound to follow and they include imposition of penalties. Being so, the relevant provision in that regard is very clear which needs no further elaboration. We do not find any substance in the contention sought to be raised on behalf of the assessee. 19. In Kitply Industries case, the Tribunal while observing that there was bona fide mistake on the part of the assessee had held that the provisions of Section 11AC of the Central Excise Act, 1944 were not attracted. Obviously, in case of bona fide mistake on the part of the appellants, question of intentional evasion of duty does not arise, however, in the case in hand, as already seen above, there was any bona fide mistake in non-payment of duty. They had not only collected the duty but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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