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Rate of interest on delayed payment of duty as applicable during the impugned period Issues therein

Central Excise - By: - Bimal jain - Dated:- 13-5-2016 - Dear Professional Colleague, Rate of interest on delayed payment of duty as applicable during the impugned period - Issues therein We are sharing with you an important judgement of the Hon ble CESTAT, Chennai in the case of Jeevan Diesels & Electricals Ltd. Vs. Commissioner of Central Excise, Pondichery [2016 (3) TMI 438 - CESTAT CHENNAI] on the following issues: Issues Whether applicable rate of interest for delayed payment under Secti .....

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Show Cause Notice dated January 20, 2012, was issued to the Appellant demanding duty of ₹ 1,12,25,765/- along with interest and penalty under Section 11AC of the Excise Act read with Rule 25 of Central Excise Rules, 2002a ( the Excise Rules ). Entire amount of duty was paid on various dates and the last instalment was paid on April 15, 2012, i.e. before passing of the Adjudication Order. Thereafter, the Adjudicating Authority appropriated entire duty amount paid by the Appellant and adjus .....

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, 2011. There is no suppression of fact for which penalty under Section 11AC of the Excise Act can be imposed as the Appellant has been regularly filling the ER -2 Return and properly mentioned the amount of duty payable. Further, that entire amount of duty was paid before passing of the Adjudication Order. Revenue s contention: As the Appellant did not pay the amount of duty before issuance of the SCN, therefore penalty has been rightly imposed on them; As rate of interest was increased from 13 .....

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e to know about non-payment of duty only from said ER-2 returns, as amount was indicated in column 'duty payable' but column 'duty paid' was left blank. Hence, there was no suppression/intention to evade/mens rea and, therefore, penalty under Section 11AC of the Excise Act was set aside. But, for belated payment of duty, penalty of ₹ 5 lakhs was imposed under Rule 25 of the Excise Rules. Thus the Appeal was partly allowed in favour of the Appellant. Our Comments: It would n .....

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