2003 (4) TMI 201 - AT - Central Excise

Tribunal overturns penalty for duty non-payment, citing lack of mandatory advance payment requirement

VISHESH DHATU INDUSTRIES Versus COMMISSIONER OF CENTRAL EXCISE, SURAT

The Tribunal allowed the appeal of a re-rolling mill with an induction furnace against the imposition of a penalty for non-payment of duty. The ... Production capacity based duty Issues:1. Imposition of penalty on the appellant for non-payment of duty.2. Contradiction in the Commissioner's order regarding the imposition of penalty.3. Interpretation of rules regarding payment of duty in advance for the period of abatement.4. Comparison with a previous Tribunal decision in a similar case.5. Analysis of circulars issued by the Board regarding abatement and duty payment.6. Examination of amendments to rules and their applicability to the case.7. Justification for granting abatement to the appellant.Analysis:The case involved an appeal against the imposition of a penalty on the appellant, a re-rolling mill with an induction furnace, for non-payment of duty for a specific period. The Deputy Commissioner had confirmed the duty demand and imposed a penalty, which was appealed by the appellant. The Commissioner (Appeals) found that the appellant had furnished all required information and set aside the duty demand for a certain period but reduced the penalty. However, there was a contradiction in the Commissioner's order regarding the payment of duty in advance and the imposition of the penalty based on non-payment.The Tribunal referred to a previous decision concerning the liability to pay duty in advance for a period eligible for abatement. It noted that the rules did not explicitly require payment of duty in advance when abatement was available. Circulars issued by the Board supported the view that duty payment in advance was not mandatory in certain situations of non-production. The Tribunal found that the reasoning from the previous decision applied to the current case as well.The departmental representative argued that different criteria applied to claiming abatement for an induction furnace based on a Board circular. However, the Tribunal observed that the rules did not specify the requirement of paying duty in advance when claiming abatement. The absence of such a provision indicated that the appellant should be granted abatement without the need for pre-payment of duty.The Tribunal also addressed an amendment to the rules requiring duty payment for abatements less than a month, but this amendment was not applicable to the period in question. Therefore, the Tribunal concluded that there was no justification for denying abatement to the appellant. Consequently, the appeal was allowed, and the impugned order imposing the penalty was set aside.