Tribunal reduces penalty for late payment, emphasizes timely compliance and taxpayer rights.

The Tribunal allowed the appeal of M/s Saksham Impex Pvt Ltd, reducing the penalty imposed under section 28 of the Customs Act, 1962, from 25% to 15%. Despite the tax authorities' failure to encash the demand draft within the prescribed time, the Tribunal deemed the submission of the draft as compliance with statutory requirements, citing precedents. Emphasizing timely compliance and the impact of tax authorities' actions, the decision underscored the appellant's entitlement to the benefit of reduced penalties.

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Issues:
1. Benefit of reduction in penalty under section 28 of the Customs Act, 1962.
2. Failure of tax authorities to encash the demand draft and its impact on eligibility for reduced penalty.

Analysis:
1. The appellant, M/s Saksham Impex Pvt Ltd, challenged the order-in-appeal rejecting their plea for a reduction in penalty from 25% to 15% under section 28 of the Customs Act, 1962. The impugned order was based on the ground that although the duty, interest, and penalty were tendered initially through a demand draft within the prescribed thirty days, it was not credited to the exchequer until a fresh submission of the demand draft in September 2015. The appellant contended that they had discharged their obligations within the stipulated time, and the failure of the tax authorities to encash the demand draft should not affect their eligibility for the reduced penalty.

2. The appellant argued that the submission of the demand draft should be considered as compliance with the requirements of section 28(6) of the Customs Act, 1962, entitling them to the benefit of reduced penalty. They relied on previous Tribunal decisions to support their contention. The Authorized Representative reiterated the contents of the impugned order, emphasizing strict compliance with the law for availing the benefit of reduced penalty. The Tribunal noted that the failure to encash the demand draft was due to the tax authorities' dereliction, and the appellant had also discharged the interest liability without objection.

3. Citing precedents, the Tribunal held that the submission of the demand draft by the appellant should be deemed as payment of duty, as established in previous Tribunal decisions. Considering the appellant's compliance with the statutory requirements and the tax authorities' failure to deposit the demand draft, the Tribunal allowed the appeal and reduced the penalty imposed on the appellant to 15%. The decision highlighted the importance of timely compliance and the impact of tax authorities' actions on the eligibility for reduced penalties under the Customs Act, 1962.

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