ORDER
G.A. Brahma Deva, Member (J)
1. These are two appeals filed by the appellants, accompanying with the stay applications.
2. By impugned order, the Commissioner has imposed penalty of Rs. 1 lakh under Rule 173Q of the Central Excise Rules on the first appellant, M/s. India Cements Ltd. and Rs. 10,000 on G.S. Naidu, Assistant General Manager of the Company.
3. After hearing for sometime, with reference to the stay applications filed by the applicants, we felt that the matter itself can be disposed off on the limited issue. Accordingly, amount required to be deposited for the purpose of hearing the appeals is dispensed with and appeals were taken for regular hearing with the consent of both sides
4. It was submitted on behalf of the appellants that the appellants cleared the cement round the clock. On three occasions, on noticing that there was not sufficient credit balance on the eve of bank holiday they approached the Central Excise Department, obtained permission of the Additional Commissioner and presented cheques towards duty deposit in personal ledger account. It was done as per the established procedure prescribed by the Board for payment of duty during periods of bank strikes. Correct entries were made in PLA after presentation of cheques to the Department. The cheques were not dishonoured but duly realized. Goods were cleared on the basis of entries made in PLA after presentation of cheques. The Department had correspondence with the bank and found that the appellants did not have credit balance in the bank account. It was submitted by the Counsel that the cheques were duly realized on the basis of O.D. facility and accordingly, the amount was credited to the Government’s account. The Department has initiated the present proceedings alleging the appellants had cleared the goods without payment of duty during the period between the date of presentation of cheque to the Department and the date shown on the challan by the Bank.
5. The Counsel contended that penalty is not imposable either under Rule 173Q or under 209A of the Central Excise Rules, in the facts and circumstances. Furthermore, the Commissioner has given a finding that it is only a case of delayed payment of duty and not a case of evasion of duty or a case of intention to evade payment of duty. He drew our attention to the relevant portion in Para 27 of the impugned order which is as under:
27. In the present case the assessee have failed to maintain sufficient balance in their account current in spite of their declaration/undertaking given at the time of presenting cheques to maintain the same. As a result of the above, the goods were cleared from the factory on which the duty element is Rs. 1,35,41,878/-, contrary to the provisions as stated above. However, I consider the lapse as “delayed payment of duty” only as there is neither “evasion of duty” nor “intention to evade payment of duty” involved in the offence committed. Here misdeclaration caused violation of rules and the same has not resulted evasion of duty with an intention. As such I do not want to resort to extraordinary penal provisions under Section 11 AC since I already inclined to impose penalty under Rule 173Q of Central Excise Rules, 1944, which is imperative and not discretionary. Accordingly, I do not want to demand penal interest on the said amount under provisions of Section 11AB. 1 also do not want to confiscate the land, plant, machinery of the assessee for mere violation of Rules.
6. He contended that having given a categorical finding that there was no intention to evade payment of duty, there was no justification in imposing penalties. In support of his contention he referred to the following decision:
1. Apex Steels (P) Ltd. v. CCE, Chandigarh
2. Sona Wires (P) Ltd. v. CCE, Raipur
3. Synthetics & Chemicals Ltd. v. CCE, Kanpur
4. In Re: Sahara Airlines Ltd. 2000 (117) ELT 802 (GOI)
5. Master Strips Pvt. Ltd. v. CCE, Bangalore 1999 (35) RLT 191 (CEGAT)
6. SAIL v. CCE, Bolpur
7. Heard Shri Narasimha Murthy, Learned DR for the Revenue.
8. We have carefully considered the submissions made by both sides. In the instant case, the penalties have been imposed on the appellants on the ground that there is a gap of few days between the date of presentation of cheque to their banker and the date of actual realization of the amount by the Revenue. As can be seen that there is no dispute that the cheques presented by the appellants were subsequently encashed by the Revenue and no cheque was dishonoured and accordingly the date of presentation of the cheque has to be taken as the relevant date for the purpose of taking credit. Precisely this was the view taken by the Tribunal in the case referred to above. Furthermore, the Commissioner himself has given a categorical finding that there was no intention to evade payment of duty. In these circumstances, the imposition of penalty is not justifiable. Accordingly, we set aside the impugned order and appeals are allowed with consequential relief, if any.
(Pronounced on 29.1.2.002)