2012 (4) TMI 518 - AT - Central Excise

Tribunal waives penalty for late filings under Central Excise Rules, rules in favor of appellant

The Tribunal granted the appellant's application for waiver of pre-deposit of penalty and allowed the appeal, overturning the penalty imposed for delayed ... Waiver of pre-deposit - penalty under Central Excise Rules - special procedure under Rule 15 - delayed declarations under Notification No. 17/2005 - violation of Rule 25 for delayed filing of declarations - discharge of duty liability by clearance of final productsSpecial procedure under Rule 15 - delayed declarations under Notification No. 17/2005 - violation of Rule 25 for delayed filing of declarations - penalty under Central Excise Rules - waiver of pre-deposit - Whether penalty imposed for belated filing of declarations under Notification No. 17/2005 (and breach of Rule 25) is warranted where the assessee cleared final products after discharging duty as per the notification, and whether pre-deposit of the penalty should be waived. - HELD THAT: - The appellant had opted for the special procedure under Rule 15 and admittedly filed the declarations belatedly as required by Notification No. 17/2005. It is undisputed that the appellant cleared the final excisable products after discharging the duty liability calculated in accordance with the notification. The penalty was imposed solely on the ground of delayed filing of declarations and consequent contravention of Rule 25. Having discharged the duty liability by clearance of goods in accordance with the notification, the appellant's belated filing of declarations did not warrant the imposition of penalty in the peculiar facts of this case. In view of these considerations the tribunal found the penalty to be unwarranted and allowed relief by setting aside the impugned order; the stay application for waiver of pre-deposit was allowed and the appeal was disposed of on merits by quashing the penalty.Impugned order set aside; penalty quashed and pre-deposit waived; appeal allowed.Final Conclusion: The tribunal allowed the stay application, waived the pre-deposit, and on merits set aside the penalty imposed for delayed filing of declarations since the assessee had discharged the duty liability on clearance of goods in terms of the notification; appeal allowed and penalty quashed. Issues:Waiver of pre-deposit of penalty imposed by the adjudicating authority and upheld by first appellate authority.Analysis:The appellant filed a stay petition seeking waiver of the pre-deposit of a penalty of Rs. 25,000 imposed by the adjudicating authority and upheld by the first appellate authority. Despite no appearance on behalf of the appellant, a written submission was filed, citing a similar case. The Tribunal found the issue to be straightforward and decided to dispose of the appeal at that moment. The application for waiver of pre-deposit was granted, and the appeal was taken up for disposal.The main argument presented by the appellant was that they had followed the special procedure under Rule 15 of the Central Excise Rules, 2002 but had filed the required declarations belatedly as per Notification No. 17/2005. It was acknowledged that the appellant had cleared the final products upon discharging the duty liability based on the notification calculations. The penalty was imposed due to the delayed filing of declarations, a violation of Rule 25 of the Central Excise Rules, 2002. The Tribunal, after considering the facts, concluded that since the appellant had cleared the excisable products by paying duty per the notification, despite the delayed declarations, penalizing them seemed unjustified. Therefore, the impugned order was set aside, and the appeal was allowed by overturning the penalty imposed on the appellant. The judgment was dictated and pronounced in court by Shri M.V. Ravindran, J.