Penalty of Excise after due date of payment

[Umesh Talanpuri]

Dear Sir/Madam

I am small scale Ind. I am paid Excise duty regulary. but last July-13 Payable amt. 120000/- on due date 05/08/2013, My Cenvat credit Rs. 45000/-. Now Balance amt of payable Rs. 75000/-. my accountant made mistake in taken credit, he was taken Rs. 55000/- instead of 45000/-. Rs. 10000/- excess credit taken in Part-II, now balance payment Rs. 65000/- paid by GR-7 instead of 65000/-..inquiry by Excise dpar. I am pay difference with interest. on 10/09/2013. 

please advice me, can i faulty in payment . 

 

[Mahir S]

As duty already paid with interest, the matter is settled from your end. Penalty may be imposed if SCN is issued on the issue.

[Mahir S]

As per Rule 8 of the Central Excise Rule, 2002 the duty, on the goods removed from the factory or warehouse in which goods are deposited without payment of duty, shall be paid on monthly basis by the 5th day of the following month from the end of quarter - for the units availing SSI exemption.

Even otherwise sub rule 3 and 3(A) of rule 8 shall not apply in your case as duty already paid with interest and mistake happenend due to ignorance.

[phaniraju konidena]

If duty and interest is already paid before issue of showcause notice, there is no question of payment of penalty as held by the Apex Court in the case of Visakhapatnam Steel Plant.

[Umesh Talanpuri]

Thank you very much to all

AI Summary

Penalty for delayed excise duty unlikely if duty and interest are paid before issuance of a show-cause notice. Where excise duty was underpaid due to an inadvertent excess Cenvat credit claim, the taxpayer's subsequent payment of the outstanding duty with interest before initiation of show-cause proceedings is treated as removing the basis for a penalty; Rule 8 compliance timing and the taxpayer's mistake due to ignorance are cited as mitigating factors, though a penalty may still be imposed if a show-cause notice issues prior to payment.