Penalties revoked for excise duty delay, upheld for late filing. Appeal partly allowed.

The Tribunal found that penalties under certain sections and rules for delayed payment of excise duty and use of cenvat credit during the default period were not sustainable due to lack of intent to evade payment. However, a penalty under Rule 27 of Central Excise Rules, 2002 was upheld for delayed duty payment and late filing of returns. The appeal was partly allowed, modifying the impugned order accordingly.

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Issues involved: Whether appellant is liable for penalty under Section 11AC of Central Excise Act, 1944, Rule 25 and Rule 27 of Central Excise Rules, 2002 and Rule 15(2) of Cenvat Credit Rules, 2004 in a case of delayed payment of excise duty and utilization of cenvat credit for payment during default period.

Summary:

The appellant in the present case faced the question of liability for penalties under various sections and rules due to delayed payment of excise duty and subsequent use of cenvat credit for payment during the default period. The appellant's representative argued that there was no malafide intent as the duty was eventually paid, citing legal precedents to support their case. The Revenue representative reiterated the findings of the impugned order.

Upon careful consideration, the Tribunal found that this was a straightforward case of delayed payment of admitted excise duty without any intention to evade payment. The appellant had not denied the liability, and all transactions were duly recorded. The Tribunal noted that there was no provision for penalty under Rule 8 for monthly duty payment delays, only requiring interest for delays. Additionally, the utilization of cenvat credit during the default period was permissible based on a judgment by the Hon'ble Gujarat High Court.

The Tribunal concluded that the penalties under Section 11AC of the Act, Rule 25 of Central Excise Rules, 2002, and Rule 15(2) of Cenvat Credit Rules, 2004 were not sustainable in this case. However, a penalty under Rule 27 of Central Excise Rules, 2002 was deemed appropriate for the delayed duty payment and late filing of ER-1 returns. As a result, the penalty imposed under Rule 27 was maintained, and the impugned order was modified accordingly. The appeal was partly allowed based on these findings.

(Separate Judgement by Judges: None)

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