Judgment:
Per: Dr. Chittaranjan Satapathy,
Both sides are in appeal against the same impugned order. Shri K.S. Venkatagiri, Ld. Advocate appearing for the appellant assessee, states that he is not pressing the appeal against the demand of duty and further states that the demanded amount has already been paid. He however, pleads that the penalty of Rs. 50,000/- imposed by the lower appellate authority should be set aside as the appellants did not know at the time of removal of the goods that they would be receiving additional amounts.
2. The department is in appeal against the impugned order as the lower appellate authority has demanded the interest and penalty under Section 11AB and 11AC. After hearing the matter for some time, we find that the issue involved in this case is akin to the issue decided by the Hon’ble Supreme Court in the case of CCE Pune Vs. SKF India Ltd. - 2009 (239) ELT 385 (S.C). The appellant assessee did not know at the time of clearance of the impugned goods that they would be receiving additional amount towards the value of goods. They have paid the differential duty after receiving additional amount and the Ld. Advocate is not pressing the appeal in relation to the demand of differential duty. We note that in the case of SKF India Ltd. (cited supra), Hon’ble Supreme Court has held that payment of differential duty at a later date is clearly a case of short payment of duty though completely unintended and without element of deceit. The Hon’ble Supreme Court has also held that interest is chargeable under Section 11AB but no penalty is attracted under Section 11AC in the absence of fraud, suppression etc. Applying the ratio of the said decision, we are of the view that the adjudicating Commissioner has correctly held that no penalty on account of fraud, suppression etc., is leviable in this case. As regards the payment of interest, he has also correctly held the same is not chargeable as at the material time the provision of charging interest on delayed payment was linked to cases of fraud, suppression etc.
3. As regards the token penalty of Rs. 50,000/- imposed for contravening Rule 173F, we find that under the said Rule, the appellant assessee was required to determine the correct duty amount and pay the same before clearance. In the light of the cited order of the Hon’ble Supreme Court, there was an obligation, on the appellant assessee to pay the entire amount of duty at the time of removal itself. Therefore, by paying the duty short, the appellants have contravened Rule 173F and consequently they are liable to penalty under Rule 173Q for removal of goods in contravention of Rules. We also note that the adjudicating Commissioner has correctly noted that under Rule 173Q (1) (a), intention to evade payment of duty is not an essential ingredient to invite penalty. Hence, we are of the view that in regard to the penalty of Rs. 50,000/- imposed by the adjudicating Commissioner, no intervention is called for.
4. In view of the foregoing, we uphold the impugned order and dismiss the appeal filed by the appellant assessee as well as the appeal filed by the department.