2013 (11) TMI 695 - AT - Central Excise

Court upholds penalty reduction for willful delay in duty payments; Revenue's appeals rejected

The court condoned the Revenue's delay in filing the appeal and addressed the imposition of penalty and redemption fines for delayed duty payments. The ... Delay in the payment of duty as per Rule 8 of the Central Excise Rule 8(1) of 2002 - Penalty under Rule 27 – Held that:- The lapse admitted by the assessee and the duty was subsequent paid along with interest - Payment of interest is penal in action and is in the nature of compensation for the loss of Revenue - when the goods already stands cleared by the assessee and are no longer available for confiscation, imposition of redemption fine was neither justified nor warranted, as correctly held by first appellate authority - Relying upon COMMISSIONER OF C. EX. & CUSTOMS V/s SAURASHTRA CEMENT LTD. [2010 (9) TMI 422 - GUJARAT HIGH COURT] – there was no infirmity in the order – Decided against Revenue. Issues involved:Delay in filing the appeal by the Revenue, imposition of penalty and redemption fines, violation of Rule 8 of the Central Excise Rules 2002, willful and deliberate delay in payment of duty, non-payment of duty, suppression of facts, mens rea, appeal against imposition of redemption fine for confiscated goods.Analysis of Judgment:1. Delay in Filing Appeal:The judgment begins by condoning the delay of 11 days in filing the appeal by the Revenue. The issue of delay is resolved, and the judgment proceeds to address the substantive matters related to the imposition of penalty and redemption fines.2. Imposition of Penalty and Redemption Fines:The case involved a delay in payment of duty by the respondents, leading to proceedings initiated by the Revenue. The original adjudicating authority imposed a redemption fine of Rs. 4.5 lakh and penalties on the company and its Managing Director. However, on appeal, the Commissioner (Appeals) set aside the redemption fine and reduced the penalty imposed on the Managing Director. The judgment highlighted the violation of Rule 8 of the Central Excise Rules 2002, emphasizing willful and deliberate actions in delaying duty payments.3. Violation of Rule 8 and Willful Delay:The judgment detailed the instances of delayed duty payments by the respondents, illustrating a pattern of non-compliance with the prescribed deadlines. It was noted that the respondents had willfully delayed payments, suppressed facts, and evaded duty payments intentionally. The involvement of the Managing Director and the Accounts Officer in the non-payment and late payment of duties was also emphasized, indicating mens rea in their actions.4. Appeal Against Redemption Fine:The Revenue appealed against the order imposing the redemption fine for confiscated goods. However, the judgment analyzed the facts and determined that the duty liability was acknowledged and subsequently paid with interest. The judgment concluded that the imposition of the redemption fine was not justified as the goods had already been cleared by the assessee.5. Penalty Imposition and Precedent Decision:Regarding the penalty, the judgment referenced a precedent decision involving M/s. Saurashtra Cement Ltd., which established Rule 27 as the proper penal rule for violations of Rule 8, prescribing a minimum penalty of Rs. 5,000. This decision was upheld by the Hon'ble Gujarat High Court, providing a legal basis for the penalty imposition in the present case.6. Conclusion and Disposition:In conclusion, the judgment found no infirmity in the order of the Commissioner (Appeals) regarding the penalty and redemption fine. The Revenue's appeals were rejected, and the COD applications and appeals were disposed of accordingly. The judgment provided a comprehensive analysis of the issues involved, addressing the legal aspects of penalty imposition and redemption fines in the context of the Central Excise Rules 2002.This detailed analysis of the judgment highlights the key legal points, precedents, and decisions made by the tribunal in resolving the issues presented in the case.