2017 (4) TMI 643 - AT - Central Excise

Tribunal upholds Commissioner's order on Central Excise Act penalty, emphasizing intent to evade duty

M/s Ramco Industries Ltd. Versus Commr. of Central Excise, Haldia

The Tribunal upheld the Commissioner (Appeals) order, dismissing the appeal against the demand of duty, interest, and penalty under Section 11AC of the ... Waiver of penalty - appellant case is that the mistake for non-payment of duty is a bona fide mistake on the part of the person, who was in-charge for looking into this matter and they had no intention to evade payment of duty - Held that: - it is clear that had the Audit not detected the case, the duty would not have been paid by the assessee. Thus, there is clear intent to evade. There is no case for waiver of penalty as there was a positive act on the part of the appellant, which led to evasion of duty - appeal dismissed - decided against appellant. Issues:- Appeal against Order-in-Appeal No.11/HAL/2012 for demand of duty, interest, and penalty under Section 11AC of Central Excise Act, 1944.- Applicability of Notification No.4/2007-CE dated 1.3.2007 for cement clearance.- Request for waiver of penalty due to a bona fide mistake.- Arguments on revenue neutrality and intent to evade duty.- Citation of case laws supporting respective positions.- Assessment of conduct and compliance of the appellant.- Decision on the sustainability of the Commissioner (Appeals) order.Analysis:The appellant, a cement manufacturer, filed an appeal against the Order-in-Appeal for demand of duty, interest, and penalty under Section 11AC of the Central Excise Act, 1944. The dispute arose from the appellant's application of the rate of Rs. 350/- per ton instead of Rs. 400/- per ton for cement clearance in bulk under Notification No.4/2007-CE dated 1.3.2007. The appellant acknowledged the duty demand and interest but sought a waiver of penalty, citing a bona fide mistake by the responsible individual. The appellant emphasized revenue neutrality and the absence of intent to evade duty, supported by case laws like CCE, Noida Vs. India Yamaha Motor Pvt. Ltd. The Revenue contended that the duty should have been paid promptly upon detection, citing case laws such as Star Industries Vs. Commr. of Customs (Imports), Raigad.The Tribunal noted the appellant's argument of inadvertent mistake and revenue neutrality but emphasized that availing an exemption requires due diligence, questioning the delayed duty payment despite detection. The Tribunal referenced case laws to differentiate issues of valuation and classification from exemption benefits. Referring to the case of M/s Star Industries, the Tribunal highlighted the significance of intent to evade duty, concluding that the appellant's conduct did not warrant penalty waiver due to the clear evasion intent. The Tribunal found no grounds for penalty waiver, given the positive act leading to duty evasion.Ultimately, the Tribunal upheld the Commissioner (Appeals) order, dismissing the appeal. The decision was based on the appellant's delayed duty payment despite detection, indicating an intent to evade duty. The Tribunal's analysis focused on the appellant's conduct, compliance, and the applicability of exemption benefits, leading to the dismissal of the appeal.