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2015 (11) TMI 460 - CESTAT MUMBAI

2015 (11) TMI 460 - CESTAT MUMBAI - 2015 (329) E.L.T. 714 (Tri. - Mumbai) - Failure to pay duty - Clandestine removal of goods - Penalty u/s 11AC - Held that:- duty, which was not paid within stipulated time period, has been paid by the appellant on their own alongwith interest and the same has been declared in ER-1 return and informed separately vide letter dated 20/10/2007. The case of the appellant is squarely covered under sub section (2B) of Section 11AC. In view of this position, the depar .....

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facts of the present case. In view of this position, I am of the considered view that lower authority neither should have issued any show cause notice nor should have imposed penalty. Therefore, impugned order is not maintainable and hence the same is set aside - Decided in favour of assessee. - Appeal No. E/384/11 - Final Order No. A/2030/2015-WZB(SMB) - Dated:- 3-6-2015 - Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri Bharat Raichandani, Advocate For the Respondent : Shri N.N. Pr .....

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by the appellant for the May 2007, it was noticed that appellant failed to pay Central Excise duty amounting to ₹ 4,98,859/- by 5th of succeeding month as prescribed under Rule 8 of Central Excise Rules, 2002. The outstanding payment of duty in respect of clearances affected in the month of May, 2007 was discharged on 27/8/2007 alongwith interest of ₹ 14, 411/- beyond the period of 30 days. Default in payment of Central Excise duty continued in month of June 2007 to July 2007. In bo .....

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held to be cleared without payment of duty and liable for confiscation and appellants are liable for imposition of penalty as proposed in the show cause notices dated 30/9/2008. The show cause notices were adjudicated by adjudication order dated 24/9/2010 wherein following order was passed. (i) I confirm the duty amounting to ₹ 6,87,714/- and ₹ 5,64,855/- being the total Cenvat duty including Edn. Cess and Secondary and Higher Secondary Edn. Cess for the month of July, 2007 and Augus .....

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0/10/2007 respectively, I appropriate the same against the confirmed interest liability. (iii) I impose penalty of ₹ 6,87,714/- and 5,64,855/- (Total of ₹ 12,52,569) on them under the provisions of Rule 25(1) (a) of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 provided that the benefit of reduced penalty as per proviso 2 to Section 11AC of the Central Excise Act, 1944 shall be available to the assessee if the amount of penalty so determined is .....

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Shri. Bharat Raichandani, Ld. Counsel for the appellant submits that in the present case, the issue is only delay in payment of monthly excise duty, which has been paid alongwith interest before issuance of show cause notice. The departments case is that since, during the defaulted period the appellant was required to pay all duty on consignment basis and they have not paid on consignment basis, duty was paid on monthly basis, therefore they are liable for penalty under Rule 25 read with Secti .....

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st without any contest no show cause notice should be issued. The Appellant declared in their monthly ER-1 return as well as appellant has intimated regarding payment separately vide their letter dated 20 Oct 2007. In this case department should not issue show cause notice. Since show cause should not have been issued, no question of imposition of penalty arises. He further submits that since all clearances were made under cover of duty paying invoices and the clearances were declared in ER-1 re .....

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o pay duty within due date and if it is paid belatedly beyond the 30 days from the due date, then the clearances will be treated as without payment of duty and consequences such as fine and penalty will follow accordingly penalty under Section 11AC read with Rule 25 required to be imposed. He placed reliance on the following judgments:- (a) CCE, Chennai-II Vs. Mefco Engineers (P) Ltd. [2015(317) ELT 461(Mad)] (b) Commr. of C. Ex. & Cus., Aurangabad Vs. R.R. Omerbhay Pvt. Ltd.[2011(269) ELT 4 .....

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of duty alongwith interest have been declared by the appellant in their monthly ER1 return. It is also noted that for the entire defaulted period appellant have been paying the duty from PLA and not from Cenvat Account. Since the duty which was proposed in the show cause notice and confirmed in the adjudication order had been paid by the appellant alongwith interest before issuance of show cause notice and department came to know about this discrepancy only from the appellants ER-1 return and .....

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