AKAR LTD. Vs. COMMISSIONER OF CENTRAL EXCISE, VAPI

JUDGEMENT

(1.) THE appellants defaulted in monthly payment of duty in the month of July 2008 to November 2008 beyond 30 days and cleared the goods by utilizing the CENVAT credit and without payment of duty exclusively from the account current during the default period. Treating this as contravention of provisions of Rule 8(3A) of Central Excise Rules, 2002 (Rules), proceedings were initiated which culminated in confirmation of demand of duty of Rs. 8,24,877/ - (Rupees Eight Lakhs, Twenty Four Thousand, Eight Hundred, Seventy Seven only). Further, Penalty of Rs. 5 lakhs (Rupees Five Lakhs only) has been imposed under Rule 25 of Central Excise Rules, 2002.

(2.) LD . Consultant on behalf of the appellant relied upon the decision of Honble High Court of Allahabad in the case of CCE, Meerut v. Kitply Industries Ltd. - 2010 (252) E.L.T. 18 (All.), to submit that penalty under Section 11AC was not imposable and maximum penalty that can be imposed is only Rs. 5,000/ - (Rupees Five Thousand only) in cases where default has occurred because of bona fide mistaken belief. He also relied upon the decision of the Tribunal in the case of CCE, Mangalore v. Ramson Rigid PVC Pipes - 2010 (254) E.L.T. 473 (Tri. -Bang.), to submit that there was no intention to evade payment of duty and therefore penalty under Section 11AC was not warranted. He relied upon the decisions in the cases of Tejpal Paper Mills Ltd. v. CCE, Ahmedabad - 2010 (259) E.L.T. 79 (Tri. -Ahmd.), CCE v. Saurashtra Cement Ltd. - 2010 (260) E.L.T. 71 (Guj.), to submit that no penalty under Rule 25 can be imposed and maximum penalty that can be imposed would be under Rule 27, which is Rs. 5,000/ - (Rupees Five Thousand only).

(3.) LD . JDR reiterates the reasoning adopted in the impugned order.