ALCATEL LUCENT INDIA LTD. Vs. THE COMMISSIONER OF CENTRAL EXCISE BANGALORE

JUDGEMENT

(1.) THIS application filed by the appellant seeks waiver and stay in respect of an amount of penalty of Rs. 50,000/ - imposed on them under Rule 25 of the Central Excise Rules, 2002. The learned consultant for the appellant prays for final disposal of the appeal itself. Having regard to the nature of the issue involved in this case, I am inclined to accede to this request. Accordingly, after dispensing with pre -deposit, I take up the appeal.

(2.) THE appellant is engaged in the manufacture of excisable goods. During the material period, they had cleared some of these goods on payment of duty based on the price originally agreed with the buyers. Subsequently, they entered into negotiations with buyers for higher price by invoking the price variation clause of the relevant agreements. The buyers agreed for enhancement of price to certain levels, whereupon the appellant issued supplementary invoices to them for recovery of the differential price and payment of differential duty. These payments of differential duty under the supplementary invoices were, however, not accompanied by any payment of interest. Internal auditors of the department detected this non -payment of interest and raised objections, but the appellant did not pay interest at that stage either. It was after receipt of show -cause notice dated 21.1.2010 that they paid -up the interest, which took place in March 2010. The adjudicating authority noted this fact and appropriated the payment towards the demand raised under Section 11AB of the Central Excise Act. It also imposed a penalty of Rs. 50,000/ - on the assessee under Rule 25 of the Central Excise Rules, 2002, which provision had also been invoked in the show -cause notice. The present appeal is directed against this penalty.

(3.) HAVING considered the submissions, I find that it is not in dispute that the interest on differential duty was not paid by the assessee even when the liability was pointed out by the departmental auditors. It appears that the Hon'ble Supreme Court's decision in the case of SKF Ltd. (supra), was known to the assessee about the time when their records were audited by the officers of the department. Nevertheless, there was no payment of interest by the assessee for some time. They chose to pay the amount only after receipt of the show -cause notice. In the absence of satisfactory explanation of the default, I am constrained to take the view that the appellant wanted to evade payment of interest. This conduct of the appellant certainly invited the penal provisions of Rule 25. Though the amount of interest, payment whereof was evaded for some time by the assessee, was as high as Rs. 6,69,511/ - , the adjudicating authority chose to impose a penalty as low as Rs. 50,000/ - . In my view, the adjudicating authority was extremely fair to the assessee. There is no reason to interfere with its decision. The appeal stands dismissed of. The stay application also stands disposed of.