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2015 (11) TMI 1410 - CESTAT MUMBAI

2015 (11) TMI 1410 - CESTAT MUMBAI - TMI - Imposition of penalty - contravention of the provisions of Rule 8(3) of the Central Excise Rules, 2002 by not paying the duty by due date as specified under Rule 8(1) of the Central Excise Rules, 2002 - whether the default committed by the respondent under Rule 8 warrants penalty under Rule 25 as held by the Additional Commissioner, or Rule 27 as held by the Commissioner (Appeals) - Held that:- In view of the law cited by the learned Commissioner (Appea .....

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Superintendent (AR) ORDER This appeal is directed against order-in-appeal No. AKP/173/NSK/2010 dated 9.6.2010 passed by Commissioner of Central Excise (Appeals), Nashik, vide which the learned Commissioner (Appeals) has upheld the decision of the adjudicating authority and modified the penalty from ₹ 1,00,000/- imposed under Rule 25 of the Central Excise Rules, 2002 to ₹ 5,000/- under Rule 27 of the Central Excise Rules, 2002. Now by the present appeal, the Revenue has challenged the .....

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e total duty of ₹ 2,18,931/- for the month, the respondent had paid ₹ 1,49,920/- before the due date and the remaining amount of ₹ 69,011/- was paid on 28.5.2009, i.e. beyond 30 days from the due date. During the period of default, the respondent was required to pay duty through PLA and on consignment basis. However, during the said period, the respondent had paid duty of ₹ 6,45,154/- through cenvat credit. Thereafter, show cause notice dated 15.6.2009 was issued asking t .....

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le 25 of the Central Excise Rules, 2002 on the respondent. The respondent filed appeal against the said order before the Commissioner (Appeals) who vide stay order dated 18.5.2010 directed the respondent to pre-deposit ₹ 6,45,154/- within 10 days and the respondent vide letter dated 7.6.2010 furnished the proof of deposit and complied with the order. Thereafter the Commissioner (Appeals) upheld the order of the Additional Commissioner but modified the penalty from ₹ 1,00,000/- to  .....

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AC and Rule 25, is not proper and legal. It is pertinent to reproduce Rule 8 as below:- Rule 8- Manner of payment (1) The duty on the goods removed from the factory or the warehouse during a month shall be paid by [the 6th day of the following month, if the duty is paid electronically through internet banking and by the 5th day of the following month, in any other case: (3A) If the assessee defaults in payment of duty beyond thirty days from the due date, as prescribed in sub-rule (1), then notw .....

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have gone through the order passed by the learned Commissioner (Appeals). The only point for my consideration in this appeal is whether the default committed by the respondent under Rule 8 warrants penalty under Rule 25 as held by the Additional Commissioner, or Rule 27 as held by the Commissioner (Appeals). I find that while deciding this issue, the learned Commissioner (Appeals) in para 6.4 has observed as under:- 6.4 Coming to the imposition of penalty under Rule 25 of CER, 2002 in case of de .....

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ue to financial crises, and that the returns were duly filed disclosing all these transactions. It would appear that the liability to pass duty was never disputed and that, subject to the liability to pay interest on the delayed payment, there was no warrant for imposing penalty under Rule 25, 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. Inferen .....

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ase it has been held that in cases of the delay in payment of duty, it is provisions of Rule 27 which have to be invoked. Relevant portion of para 02 is reproduced below: - "/ note that the law on the issue of penalty stands decided by Saurastra Cement Ltd referred above, in which case it has held that in cases of delay in payment of duty, it is the provisions of Rule 27 which have to be invoked-As the said provision provides for maximum penalty of ₹ 5,000/-. I reduce the penalty to & .....

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