2009 (4) TMI 669 - AT - Central Excise

Court affirms reduced penalty for late return submission, emphasizes prescribed limits

The court dismissed the Revenue's appeal and affirmed the reduction of the penalty for late submission of the ER-I monthly return from Rs. 10,000 to Rs. ... Penalty - Quantum of Issues:Appeal against reduction of penalty for late submission of ER-I monthly return.Analysis:The case involves an appeal by the Revenue against the reduction of a penalty imposed on the respondent for late submission of ER-I monthly return. The original penalty of Rs. 10,000 was reduced to Rs. 2,000 by the Commissioner (Appeals), which the Revenue sought to enhance back to Rs. 10,000.The judge noted that the penalty was imposed by the Asstt. Commissioner under Rule 25/27 of the Central Excise Rules, 1944 for a delay of six days in submitting the ER-I return. It was highlighted that the penalty under Rule 27, which applies to late submission of ER-I returns, has a maximum prescribed penalty of Rs. 5,000. The Commissioner (Appeals) had rightly reduced the penalty to Rs. 2,000 considering the circumstances.Upon reviewing the grounds of appeal, the judge found it puzzling that the penalty was sought to be enhanced to Rs. 10,000 when the maximum penalty under Rule 27 is Rs. 5,000. It was emphasized that Rule 25 is not applicable for imposing penalties for late filing of ER-I returns. The judge concluded that there was no infirmity in the decision to reduce the penalty, as the circumstances did not warrant an increase beyond the prescribed limits.In the final decision, the judge dismissed the Revenue's appeal, affirming the reduction of the penalty to Rs. 2,000 as determined by the Commissioner (Appeals). The judgment was delivered in open court, and the appeal was resolved in favor of the respondent.