Customs, Excise and Gold Tribunal - Mumbai
Noble Drugs Ltd., Shri D.D. Oke And Shri ... vs Commissioner Of Central Excise And ... on 18 March, 2005
ORDER T. Anjaneyulu, Member (J)
1. This is an application under Section 35F of the Central Excise Act, 1944 filed by the appellants, seeking waiver of pre-deposit amount and to stay its recovery.
2. The applicants are engaged in the manufacture of P.P. Medicines falling under Chapter 30 of the Central Excise Tariff Act, 1985. The applicants are availing Cenvat credit and paying duty on monthly basis. Due to financial crises, there was a delay in payment of duty on due date during the period August 2001, November 2001 and December 2001. The Dy. Commissioner, Central Excise & Customs, Division-II, Nashik, vide his Order dated 10.02.2002 withdrew monthly payment facility as per Rule 8 of the Central Excise Rules, 2001 and directed the company to pay duty on consignment basis through PLA for a period of two months from the date of receipt of order.
3. The appellants cleared the goods on consignment basis, but paid duty through Cenvat account instead of PLA (Account Current). They were issued two Show Cause Notices dated 16.04.2003 and 09.07.2003. On adjudication, the Asst. Commissioner of Central Excise & Customs, Nashik, by his Order-in-Original dated 13.11.2003 confirmed the duty demand of Rs. 7,29,478/-and 7,39,000/-, imposed equal penalty under Rule 25(a) of the Central Excise Rules, 2001, ordered recovery of interest and duty under Section 11AB of the Central Excise Act, 1944.
4. The Commissioner (Appeals), on stay application, directed the appellants to pre-deposit Rs. 1,00,000/- towards duty. The applicants deposited Rs. 1,00,000/-.
5. On adjudication, the Commissioner (Appeals), confirmed the demand of duty and recovery of interest. However, to avoid double payment of duty, the appellants were allowed to take re-credit of Cenvat credit already debited only after the duty and interest is paid in cash or through PLA and documentary proof is furnished. However, penalty is reduced to Rs. 8,35,000/-.
6. The applicants submit that Rule 8(A)(2) of the Central Excise Rules, 2001 has undergone a change with effect from 01.03.2003. According to the said amendment, forfeiture of two months period has been done away with and instead payment through Cenvat credit account has been continued, but penalty by way of heavy interest @ 2% or Rs. 1,000/- per day has been prescribed. In the instant case, the duty has been paid through Cenvat credit account and hence the question of imposition of penalty does not arise.
7. The Commissioner (Appeals) observed in his impugned order in para 12 that - "I find that the appellants were aware of the facts that the Dy. Commissioner has directed to clear the goods by paying duty consignment-wise through Account Current and Current Account means PLA and that failure to do so will be deemed as if such goods has been cleared without payment of duty and the consequences and penalties as provided in the Central Excise Rules shall follow. From these facts, it is clear that the appellants have knowingly contravened the provisions of Rule 8(4) of the Central Excise Rules, 2001 and thereby they are liable for penalty under Rule 25(a) of the Central Excise Rules, 2001. However, I find that imposition of equal penalty is harsh. Hence I reduce the penalty to Rs. 8,35,000/-".
8. After going through the case records and hearing the submissions of both sides, we find no prima facie case in favour of the appellants. Therefore, they are directed to pre-deposit the entire amount and report compliance on 17.05.2005.
9. The stay application is disposed off in the above terms.