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of <h1>Tribunal overturns penalty for late electronic filing due to system error</h1> The Tribunal set aside the penalty imposed on the appellant for not filing ER-1 returns electronically from April, 2010 to December, 2010. The Tribunal ... Imposition of penalty - Non submission of ER-1 returns electronically - Held that:- There is no dispute that since April, 2010 onwards in terms of the provisions of Central Excise Rules, monthly ER-1 returns were required to be filed electronically and accordingly failure to file electronically would attract penalty under Rule 27. There is no dispute that throughout during April, 2010 to December, 2010 period, the monthly returns were filed manually in time, but due to systems problem, the appellant could not file the returns electronically. From the observations of the Commissioner (Appeals) in Para 5 of the order, it is clear that there was some systems error which was rectified only in January, 2011. Thus, it is clear that non-filing of ER-1 returns electronically during April, 2010 to December, 2010 was due to systems error which was rectified in January, 2011 and therefore for this period, the appellant cannot be blamed for not filing the ER-1 returns electronically. - throughout during the period from April, 2010 to December, 2010, the returns had been filed manually and in time and just because the returns for this period could not be filed electronically in time due to systems error and were filed electronically only in July, 2011, it would not be correct to impose penalty on them under Rule 27. In view of this, the impugned order is not sustainable. The same is set aside - Decided in favour of assessee. Issues:1. Imposition of penalty under Rule 27 for not filing ER-1 returns electronically from April, 2010 to December, 2010.Analysis:The appellant failed to submit their ER-1 returns electronically from April, 2010 to December, 2010, as required by the Central Excise Rules. The Assistant Commissioner imposed a penalty of Rs. 9,000/- on the appellant for this non-compliance, which was upheld by the Commissioner (Appeals). The appellant contended that the non-filing was due to a systems error with the ACES site, and they had highlighted the issue to the Range Office and ACES Admn. They argued that the manual filing was timely and not deliberate, hence the penalty was unjustified.The Department argued that despite the account being activated in January, 2011, the appellant did not file the returns electronically for the mentioned period until 19-7-2011, leading to the penalty imposition under Rule 27. However, the Tribunal observed that the non-filing during April, 2010 to December, 2010 was due to a systems error, rectified only in January, 2011. The Tribunal held that the appellant cannot be blamed for the non-electronic filing during that period, as they had timely filed manually and the systems error was beyond their control.The Tribunal found that the appellant's failure to file electronically after the system error was rectified in January, 2011, was not sufficient grounds for imposing a penalty under Rule 27. Despite the delayed electronic filing in July, 2011, the Tribunal held that penalizing the appellant for the earlier non-compliance during April, 2010 to December, 2010 was unwarranted. Therefore, the impugned order imposing the penalty was set aside, and the appeal was allowed, ruling in favor of the appellant.
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