2007 (1) TMI 485 - AT - Central Excise

Appellate tribunal overturns penalty for late payment but upholds penalty for record-keeping violation.

The appellate tribunal set aside the penalty of Rs. 3 lakhs imposed under Rule 96ZQ(5) as nothing was due after the duty payment date. However, the ... Penalty - Imposition of - Production capacity based duty Issues:1. Penalty imposed under Rule 96ZQ(5)2. Penalty imposed under Rule 96ZQ(6)Analysis:1. The appellant filed an appeal against the penalty imposed under Rule 96ZQ(5). The rule states that an independent processor failing to pay duty by the specified date is liable to pay outstanding duty, interest, and a penalty. However, as the duty was paid on 31-7-1999 along with interest, nothing was due after that date. The proviso to the rule clarifies that if nothing is due at the end of the month, the penalty is not sustainable. Therefore, the penalty of Rs. 3 lakhs imposed on the appellant was set aside as it was not justified based on the circumstances of the case.2. Regarding the penalty of Rs. 10,000 imposed under Rule 96 ZQ(6), it was upheld. Rule 96 ZQ(4) requires independent processors to maintain proper records and file necessary returns as prescribed. Since the appellant failed to maintain proper records, the penalty was deemed appropriate. The impugned order imposing the penalty of Rs. 10,000 was upheld based on the appellant's non-compliance with the record-keeping requirements. The appeal was disposed of accordingly.In summary, the appellate tribunal set aside the penalty of Rs. 3 lakhs imposed under Rule 96ZQ(5) as nothing was due after the duty payment date. However, the penalty of Rs. 10,000 imposed under Rule 96 ZQ(6) was upheld due to the appellant's failure to maintain proper records as required by the Central Excise Rules.