Good Life Products Ltd. Vs. Cce - Court Judgment

Excerpt:
1. the stay application and appeal lies in a short compass and hence the appeal is taken up for disposal by granting waiver of penalty of rs. 35,000 imposed by the commissioner in the order-in-appeal no.30/2002 (m-lll) dt. 30.4.2002. the commissioner has accepted the bona fide of the appellant and has clearly noted that the appellant had deposited the amount even before the issue of show cause notice. in view of this circumstance, he reduced the penalty amount to rs. 35,000.the point for consideration is as to whether the penalty is leviable in a case where the appellants deposited the amount even before the show cause notice issued to them? in the case of escorts ltd. v. cc, delhi-11, 2002 (48) rlt 15, the delhi bench has held that it is a well settled law that whenever there is a voluntary payment of duty even before the issue of show cause notice, the assessee is entitled to a lenient view in the matter of imposition of penalty and the duty payable is eligible as modvat credit. the penalty imposed was set aside. in the present case also the appellants had remitted into the bank under tr6 challan dt. 11.11.96 and 12.11.96 an amount of rs. 1 lakh however, due to inadvertent they had not made entry in the pla.their contention that the amount had already been paid and it was with the government and there was non-entry in pla or their non-maintaining the pla was only a procedural lapse and it should not be a ground (or imposing the penalty. the apex court judgment in the case of hindustan steels ltd., 1978 (2) elt j 159 has held that the penalty is not imposable in cases of venial breach. in this case, the bona fide of the party has been accepted by the commissioner and the amounts were also deposited immediately. therefore, mere non-entry in pla or its non-maintenance is only a procedural lapse and venial breach. therefore in terms of the judgment rendered in the case of escorts ltd., (supra) and hindustan steels ltd. (supra), penalty in the present case is not leviable. hence, the imposition of penalty of rs. 35,000 is set aside by allowing the appeal. ordered accordingly.

Judgment:
1. The stay application and appeal lies in a short compass and hence the appeal is taken up for disposal by granting waiver of penalty of Rs. 35,000 imposed by the Commissioner in the Order-in-Appeal No.30/2002 (M-lll) dt. 30.4.2002. The Commissioner has accepted the bona fide of the appellant and has clearly noted that the appellant had deposited the amount even before the issue of Show Cause Notice. In view of this circumstance, he reduced the penalty amount to Rs. 35,000.

The point for consideration is as to whether the penalty is leviable in a case where the appellants deposited the amount even before the Show Cause Notice issued to them? In the case of Escorts Ltd. v. CC, Delhi-11, 2002 (48) RLT 15, the Delhi Bench has held that it is a well settled law that whenever there is a voluntary payment of duty even before the issue of Show Cause Notice, the assessee is entitled to a lenient view in the matter of imposition of penalty and the duty payable is eligible as Modvat credit. The penalty imposed was set aside. In the present case also the appellants had remitted into the bank under TR6 challan dt. 11.11.96 and 12.11.96 an amount of Rs. 1 lakh however, due to inadvertent they had not made entry in the PLA.Their contention that the amount had already been paid and it was with the Government and there was non-entry in PLA or their non-maintaining the PLA was only a procedural lapse and it should not be a ground (or imposing the penalty. The Apex Court judgment in the case of Hindustan Steels Ltd., 1978 (2) ELT J 159 has held that the penalty is not imposable in cases of venial breach. In this case, the bona fide of the party has been accepted by the Commissioner and the amounts were also deposited immediately. Therefore, mere non-entry in PLA or its non-maintenance is only a procedural lapse and venial breach. Therefore in terms of the judgment rendered in the case of Escorts Ltd., (supra) and Hindustan Steels Ltd. (supra), penalty in the present case is not leviable. Hence, the imposition of penalty of Rs. 35,000 is set aside by allowing the appeal. Ordered accordingly.