Central excise payment discipline dispute ends with Rule 8(3A) proceedings dropped and a limited penalty sustained.

Payment of the disputed central excise duty with interest removed the basis for continuing proceedings under Rule 8(3A) of the Central Excise Rules, 2002, so those proceedings were held unsustainable. The violation of payment discipline nevertheless justified a limited penalty under Rule 27, and the larger penalties were set aside. A penalty of Rs. 5,000 on the main appellant was upheld.

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Issues: Whether proceedings under Rule 8(3A) of the Central Excise Rules, 2002 were sustainable after payment of the disputed duty along with interest, and whether penalty could still be imposed under Rule 27 of the Central Excise Rules, 2002.

Analysis: The disputed duty had already been paid with interest, which removed the basis for continuing the proceedings under Rule 8(3A). At the same time, the violation of the payment discipline warranted imposition of a limited penalty under Rule 27 on the main appellant.

Conclusion: The proceedings under Rule 8(3A) were held unsustainable, the penalties imposed were set aside, and a penalty of Rs. 5,000 on the main appellant was upheld.

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