Rectification of Final Order: Interest & Penalty Set Aside; Pre-SCN Duty Payment Considered

The Appellate Tribunal CESTAT AHMEDABAD rectified a mistake in the Final Order, setting aside the interest liability along with the penalty. The appellant's duty payment before the Show Cause Notice was considered, leading to the conclusion that there was no revenue loss and no malafide intent in the under-valuation. The Tribunal referenced a judgment of the High Court of Gujarat and rectified the Final Order to address both penalty and interest liabilities, disposing of the application for rectification accordingly.

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Issues involved: Rectification of mistake in the final order regarding liability to pay penalty and interest.

In this judgment by the Appellate Tribunal CESTAT AHMEDABAD, the issue at hand was the rectification of a mistake in the Final Order where the Tribunal had set aside the liability to pay penalty but had not addressed the interest liability. The appellant argued that since the duty paid before the Show Cause Notice could be availed as a CENVAT Credit by their sister unit, there was no revenue loss, making it a revenue-neutral situation not warranting a penalty. However, the interest liability confirmed by the lower authorities was not addressed in the original order. The Tribunal, after considering the submissions and records, acknowledged that the appellant had paid the duty before the issuance of the Show Cause Notice, and there was no malafide intent in the under-valuation that led to the differential duty payment. Citing a judgment of the Hon'ble High Court of Gujarat, the Tribunal concluded that the interest liability also needed to be set aside along with the penalty. Consequently, the Tribunal rectified the Final Order to include a paragraph setting aside the interest liability as well, in line with the findings regarding the penalty. The application for rectification of mistake was disposed of accordingly.

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