TMI Blog2013 (1) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... PB) - Dated:- 26-7-2012 - Justice Ajit Bharihoke, Shri Rakesh Kumar, JJ. REPRESENTED BY : Shri R.K. Verma, AR, for the Appellant. Shri Mayank Garg, Advocate, for the Respondent. [Order per : Rakesh Kumar, Member (T)]. The facts leading to these appeals, in brief, are as under :- 1.1 The Respondent manufacture paper and paper board chargeable to Central Excise duty. The dispute is in respect of the period from 16-11-2001 to 30-11-2001 and 16-1-2003 to 31-1-2003. During the period of dispute, as per the provisions of Rule 8 of Central Excise Rules, 2001/2002, an assessee manufacturing excisable goods was required to discharge duty liability in respect of goods cleared during the first fortnight of the month, by 20th of the month and for the goods cleared during 2nd fortnight of the month, by 5th of the next month. There was provision that in case of delay in payment of duty for a fortnight by the due date, interest on that duty at specified rate would be chargeable. There was further provision that in case an assessee defaulted in payment of any instalment by the due date and the default continued beyond the period of thirty days from the due date, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Rule 25 of the Central Excise Rules read with section 11AC of the Act. 1.2 Against these orders of the Commissioner (Appeals) the Revenue is in appeal against the part of the order setting aside the penalty. 2. Heard both the sides. 3. Shri R.K. Verma, ld. DR, assailed the impugned order by reiterating the grounds of appeal in Revenue s appeal and pleaded that the penalty on the respondent was called for, as the Respondent while not paying the duty to the department for the fortnight from 16-11-2001 to 30-11-2001 and 16-1-2003 to 31-1-2003 has actually collected the duty from the customers; that the Respondent had acted in defiance of the law and, hence, imposition of penalty on them under Rule 25 was called for; that the Commissioner (Appeals) has wrongly set aside the order of the Joint Commissioner imposing penalty on the Respondent; and that the logic of financial hardship being faced by the Respondent put forth by the Commissioner (Appeals) to conclude that there was no intent to evade payment of duty and no penal action is warranted, is not acceptable, as there is no provision in the Central Excise Rules to give such benefit to an assessee, more so, when the Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fortnights had been mentioned in the ER-1/RT-12 returns, as from the facts narrated in the show cause notices, it is clear that this non payment of duty was detected in course of scrutiny of the ER-1/RT-12 returns; (c) In respect of first default for the second fortnight of November, 2001, as against the due date of 5-12-2001 the duty was paid by the appellant on 3-10-2002 i.e. after the issue of show cause notice dated 16-7-2002; and (d) Duty in respect of second default for the second fortnight of January 2003 was not paid even after the issue of show cause notice dated 9-7-2003 and the same was ultimately recovered by the department on 22-7-2004 partly be adjusting the duty against the refund amount due to the appellant and partly by in debit entry in Cenvat credit account. 6.1 From the facts as narrated in the order-in-original as well as order-in- appeal, it is not clear as to whether the appellant have paid the interest on the duty also for the period of delay. 6.2 The point of dispute in this case is as to whether in the circumstances of the case penalty under Rule 25(1) read with Section 11AC of the Central Excise Act, 1944 was imposable on the appellant or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r till such date on which all dues are paid, whichever is later, and during this period the assessee shall be required to pay excise duty for 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 . 8. From a reading of sub-rule (4) of Rule 8 it will be seen that this penal provision comes into picture only when (a), the default continues beyond the period of thirty days beyond the due date or the default is for the third time in a financial year; and (b) an order has been passed by the Assistant/Deputy Commissioner. 8.1 The punishment for this default is denying the facility of fortnightly payment of duty to the assessee and making him discharge the duty liability, consignmentwise and only through PLA, failing which the clearances of the goods in respect of which the duty was not paid consignmentwise - and/or was not paid through PLA, shall be deemed to be the cleanses made without payment of duty and all the consequences of Rules shall follow. This punishment period starts from the date of the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y Assistant/Deputy Commissioner under Rule 8(4) and it is not the allegation that during forfeiture period, the Respondent did not pay duty consignmentwise and through PLA. The allegation in this case is simply failure to discharge fortnightly duty liability by due date on two occasions and this non payment had been disclosed in the RT-12/ER-1 returns. It is not the Department s allegation that the Respondent while not discharging duty liability for two fortnights, had made a false claim regarding payment of duty. Thus, in the circumstances of the case, while penalty on the respondent under Rule 25 or Section 11AC would not be attracted, penalty would be attracted under Rule 27 for each default in discharge of duty liability by the due date. 12. In view of the above discussion, the Commissioner (Appeals) s order totally waiving the penalty is set aside, but instead of restoring the orders of the original adjudicating authority regarding penalty, the penalty of Rs. 5,000/- for each instance of default is imposed on the Respondent under Rule 27 of the Central Excise Rules. The Department, however, is free to initiate the proceedings under Rule 8(4) of the Central Excise Rules, 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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