CCE Vs. GRESHAYM AND CO.

JUDGEMENT

(1.) IN this case, in course of scrutiny of the ER -1 returns filed by the Respondent, it was found that by the Departmental officers that while during the month of April 2004, the duty payable was Rs. 1,70,147/ - the Respondent had paid the duty of only Rs. 58,147/ - and as such there was short payment of duty of Rs. 1,12,000/ -. Same irregularity were found for May 2004, June 2004, August 2004 and December 2004 and in respect of these months, as against the duty payable of Rs. 3,72,610/ -, the duty paid was only Rs. 1,21,876/ - and as such the duty amounting to Rs. 2,50,734/ - had been short paid. After issue of show cause notices, the Assistant Commissioner vide orders -in -original No. 85/05 dated 30/12/05 and 86/05 dated 27/12/05 confirmed the duty demands of Rs. 1,12,000/ - and Rs. 2,50,734/ - irrespectively under Rule 25(1) of Central Excise Act, 1944 alongwith interest on this duty under Rule 8(3) of Central Excise Rule read with Section 11AB of the Central Excise Act and besides this, imposed penalty of Rs. 1,12,000/ - and Rs. 2,50,734/ - irrespectively under Rule 25(1) of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act. The Respondents filed appeals before the Commissioner (Appeal) against these orders and the Commissioner (Appeal) vide orders -in -appeal No. 36/CE/DLH/07 dated 30/03/07 and 37/CE/DLH/07 dated 30/03/07, while upholding the duty demands alongwith interest, set aside the penalties imposed on the Respondent observing that in such cases, penalty under Rule 25(1) of Central Excise Rules, 2002 was not imposable and that at best penalty could be imposed under Rule 27 ibid. The Revenue has filed the appeals against these orders of Commissioner (Appeal) challenging the setting aside of the penalty on the Respondent.

(2.) HEARD both the sides.

(3.) IN this case, as narrated in the show cause notice and the order -in -original, it is clear that the Appellant did not discharge their full duty liability for the months of May 2004, June 2004, August 2004 and December 2004 and simply filed the ER -1 returns mentioning the duty payable and duty paid and they have paid the duty when the Departmental Officers detected. Though it has been pleaded by the Respondent that because of financial hardship they could not discharge full duty liability for these months, there is no intention in this regard to the department and the Appellant simply filed the ER -1 returns for these months mentioning the duty payable and the duty paid and they paid the duty only when the non -payment of duty was detected by the officers sometimes in May 2005. Looking the peculiar circumstances of the case, I am of the view the Tribunal's judgment in the cases of Saurashtra Cement Ltd. v. CCE, Rajkot (supra) and CCE, Allahabad v. R.K. Cigarettes (P) Ltd. (supra) are not applicable. It has to be kept in mind that during the period of dispute, there was system of self -assessment under which the ER -1 returns filed by the assessee are not assessed by the Range Officers and are taken up for scrutiny selectively. Therefore, if the ER -1 returns filed by Respondent had not been taken up for scrutiny by the Department, non -payment of duty would not have come to light. In view of these circumstances, I hold that the Commissioner (Appeal)'s order setting aside the imposition of penalty on the Respondent is not correct and the same is set aside. Looking to the circumstances of this case, I impose penalty of Rs. 20,000/ - (Rupees Twenty Thousand only) and Rs. 40,000/ - (Rupees Forty Thousand only) under Rule 25(1)(a) on the Respondents in respect of appeal No. E/1664/07 and E/1665/07 respectively. The impugned orders -in -appeal stands modified, as above. The Revenue's appeals are allowed.