Tribunal dismisses appeal, upholds penalty reduction for non-payment of duty on manufacturing scrap.

The appeal was dismissed by the Tribunal, upholding the Commissioner (Appeals) decision to reduce the penalty imposed on the appellant for non-payment of duty on scrap arising during manufacturing. The Tribunal emphasized that the appellant's substantial annual duty payments did not exempt them from paying duty in proportion to the duty already paid. Paying duty only after being caught by the department was deemed unjustified, and the Tribunal concluded that previous decisions did not support the appellant's argument that paying duty before notice issuance prevents penalty imposition.

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Issues: Appeal against reduction of penalty for non-payment of duty on scrap arising during manufacturing.

Summary:
The appeal was filed against the Commissioner (Appeals) order reducing the penalty imposed on the appellant for not paying duty on scrap arising during the manufacture of components of heat exchangers. The appellant argued that the duty amount involved was approximately Rs. 1,80,000, while they paid Rs. 500 crores annually, suggesting a sympathetic view should be taken.

The Member (T) noted that the appellant's contentions did not assist their case. There is no provision of law that exempts an assessee from paying duty in proportion to the duty already paid. The Member expressed surprise at the appellant's argument that duty was nominal, especially considering their substantial annual duty payments. The duty was only paid after the department discovered the non-payment, leading the Member to believe there was no justification for reducing the penalty. The Member emphasized that paying duty after being caught by the department does not absolve the penalty.

The Member dismissed the appeal, stating that the decisions of the Tribunal cited by the appellant did not support the argument that paying duty before notice issuance prevents penalty imposition. The Tribunal's decisions considered the bona fide actions of an assessee in rectifying short payments voluntarily, a scenario not applicable to the appellant who paid duty only after departmental intervention.

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