2004 (4) TMI 85 - HC - Central Excise

Dismissal of Appeal Upholding Penalty for Late Payments in Central Excise Case

The appeal under Section 35G of the Central Excise Act, 1944 regarding penalty imposition on the appellant, engaged in manufacturing steel products, was ... Penalty Issues involved: Appeal u/s 35G of the Central Excise Act, 1944 regarding penalty imposition on the appellant.Summary:The appellant, engaged in manufacturing steel products, paid duty under a compounded scheme as per Section 3A of the Central Excise Act, 1944. The impugned order revealed discrepancies in duty payment timing, leading to penalty imposition u/r 96ZP(3) of the Central Excise Rules for late payments in certain months.The fourth proviso to Rule 96ZP(3) mandates a penalty when duty is not paid by the 10th of the month, irrespective of prior payment or show cause notice issuance. The Court emphasized that penalty imposition is mandatory under the rule, not subject to timing of notice.The Court noted that the penalty specified in the rule is not a maximum but the only penalty to be levied for late payments. Despite the leniency shown by the Tribunal in reducing the penalty, the Court upheld the penalty imposition as per the rule's clear directive.As there was no cross-appeal by the department, the Court did not enhance the penalty. Consequently, the appeal was dismissed, affirming the penalty imposition based on the rule's provisions.