By TIOL News Service

MUMBAI, JAN 22, 2018: IN adjudication, the allegations of clandestine removal of goods without payment of duty were upheld and the CE duty was confirmed along with penalties etc.

The appellant accepted the duty demand and paid the same. However, in the matter of imposition of penalties, the appellant filed an appeal before the CESTAT.

An amount of Rs.4 lakhs was also paid as pre-deposit.

The CESTAT by its final Order dated 19.07.2011 observed that if the appellant deposits the interest also along with 25% of penalty within a period of 30 days, the penalty would get reduced to 25%.

The appellant complied with this order and proceeded to claim the refund of the pre-deposit made.

However, the original authority observed that although the appellant deposited interest but the same was made under a wrong accounting head and as such cannot be considered as proper implementation of the Tribunal's order. Inasmuch as it was held that the benefit of reduced penalty could not be extended to the appellant.

This order was upheld by the Commissioner (Appeals), so the appellant is again before the CESTAT.

The Bench observed -

"6. …, I find that admittedly the appellant deposited the interest within a period of 30 days along with deposit of penalty of 25%, within the said period, in terms of the Tribunal's order. In such a scenario, the penalty was directed to be reduced to 25%. The deposit of the interest under a wrong head will not wipe away the effect of the deposit and it is to be considered as if the interest amount was also deposited by the assessee. Deposit under a wrong head also goes to the Revenue only and as such it cannot be concluded that the appellant had not deposited the said interest."

Holding that the benefit of the Tribunal's order would get extended to the appellant and resultantly the appellant is entitled to the refund of the pre-deposit amount, the impugned order was set aside.

The appeal was allowed.

(See 2018-TIOL-284-CESTAT-MUM)