JUDGMENT
Gowri Shankar, Member (Technical)
1. The application is for waiver of deposit of duty of Rs. 24.64 lakhs and penalty of Rs. 2 lakhs. Duty has been demanded and penalty imposed on the ground that the applicant did not pay the duty due on various products manufactured by it.
2. The representative of the applicant explains the reason for failure to pay the duty as follows. The budget of that year converted the duties on petroleum products from specific to ad valorem duty. The applicant took time to understand the changes and therefore decided to pay duty till the time it understood the change at the earlier specific rates. Subsequently, when it found what duties were payable, it found that it had paid duty on some products in excess. Therefore, it had made adjustments in the personal ledger account at the end of the month. This is permitted in terms of Rule 173G. There has really been no short payment of duty. Financial hardship is pleaded on the ground that administered price mechanism under which there is a subsidy for certain petroleum products made up by charging higher price for others is shortly being done away with.
3. We do not prima facie find a case for the applicant. It appears to have taken the law into its own hands and decided to pay duty at whatever rates were convenient to it. It is not contended that the assessee asked the appropriate authorities for being granted the facility of provisional assessment or bring these difficulties to their notice. The applicant relies on a statement attributed to the Finance Minister in his speech introducing the budget that administered petroleum prices would not change as a result of change in the basis of levy. It would be reasonable to conclude that appropriate authorities in the Ministry of Petroleum would have been consulted or informed about the change in the levies from specific to ad valorem . After all, the implementation of the administered price mechanism requires close co-ordination of various ministries of the government. Prima facie this appears to us a tactics to follow procedures by the assessee which resulted in the short levy.
4. We fail to understand how the fact that the administered price mechanism is to be done away in the future has any consequence on the financial circumstances of the appellant. This was not explained to us. We therefore do not find any financial hardship noting that the applicant is wholly owned by the Government of India.
5. In these circumstances, we direct payment by the applicant of Rs. 24 lakhs towards the duty within two months from today, waiving thereupon the remainder of the duty and of the penalty imposed on it.
6. Compliance on 10.12.2001.