Gowri Shankar, Member (T)
1. After hearing both sides on the stay application we have decided to take up the appeal itself for disposal after waiving deposit.
2. The appellant is a processor of textile fabrics. In accordance with the Hot Air Stenter Independent Textile Processors’ Annual Capacity Determination Rules, 1998, it filed a declaration showing number of stenters and chambers installed in its factory and other relevant particulars. After considering this, the Commissioner passed order on 24-12-1998 determining the annual capacity in terms of the Rules and duty liable to be paid. This order was stated to be provisional although there is no reason shown for its provi-sionality. The assessee discharged the duty liability casted upon it by this order. On 14-6-1999 the Commissioner passed a final order determining the appellant’s duty liability. This order determined the annual capacity, and consequently the duty payable by the assessee to be higher than what had been earlier determined. The difference between the capacity (and therefore the duty payable by the appellant) initially determined, and that finally determined, has apparently arisen because in the provisional order no note has been taken of the presence of the galleries in the stenter and the final order take note of this. The assessee did not contest this final order, which is received on 3-7-1999. It paid the differential duty payable as a result of this order on 5-7-1999 and continued to discharge duty at the higher rate fixed by the final order.
3. Shortly after the issue of the Commissioner’s order notice was issued on 1-7-1999 by the Superintendent. By this notice, the Superintendent called upon the appellant to show cause why the differential duty arising out of the final order should not be paid and why penalty should not be imposed under Rule 96ZQ(5)(i). The assessee, in reply, pointed out that it had promptly paid the duty and therefore no penalty is imposable. The Assistant Commissioner did not accept this contention and imposed a penalty of Rs. 1,76,129/- (equal to the duty demanded in the notice) on the assessee. The appeal filed against this order to the Commissioner (Appeals) has been dismissed for failure of the assessee to deposit, as demanded by the Commissioner (Appeals) in his stay order, the entire penalty. Hence this appeal.
4. Sub-rule (5) of Rule 96ZQ provides that if an independent processor fails to pay the amount of duty or any part thereof by the dates specified in Sub-rule (3) he shall be liable to penalty. Sub-rule (3) provides that 50% of the duty payable for a calendar month as determined under Sub-rule (1) shall be paid by the 15th of the month and the remaining amount by the end of that month. From the facts that we have narrated, it will be evident that the appellant had been paying the entire duty payable by it monthly within the time provided. There is no allegation in the notice that such is not the case. It also evident that the liability of the appellant to pay the differential duty was not due to any fault of its own but caused by the department recalculating the duty. Whether the Commissioner’s order including the galleries in calculating the capacity of the chambers is correct or not is open to question; that matter is still unresolved. However, this matter is not relevant because the appellant has not questioned this order. Even so, the facts on the basis of which the Commissioner determined finally the capacity (and the appellant’s liability to pay duty) were before him when he passed his provisional order. Any failure to determine this finally and communicated to the appellant earlier than the date on which it was done was thus squarely upon the department. The appellant has throughout been acting bona fide and, promptly, within two days from the receipt of the final order discharged its duty liability. There was therefore no basis whatsoever for imposing penalty upon the appellant.
5. The appeal is therefore allowed and the penalty imposed set aside.