By TIOL News Service

MUMBAI, FEB 17, 2018: THE present appeal has been filed by the assessee against the Order-in-Appeal dated 20/10/2008.

In this case, the Commissioner (Appeals) had cancelled the levy of penalty by observing that there was no malafide intention on the part of the assessee.

Latching on to this line in the order, the appellant submits that when there was no malafide then the demand is to be considered as time-barred and the order confirming the duty liability should be set aside.

The AR objected by submitting that in the instant case, the duty was paid along with interest before issuing the show cause notice. So, by noting the ratio laid down in Commissioner of Central Excise v. Gaurav Mercantiles Ltd - 2005-TIOL-231-HC-MUM-CX and other case laws mentioned in his order, the Commissioner (Appeals) had cancelled the levy of penalty.

The President writing for the Bench observed -

"4. After hearing both the sides and on perusal of the record, it appears that the cancellation of the penalty; and demand of extended period are different issues which will have to be dealt separately. Regarding the extended period, the original authority has discussed it in his order in detail at para 10 . The Commissioner (Appeals) has also applied independent mind and discussed the issue in para5 which appears reasonable and we endorse the same.

5. Hence, in the instant case, we are of the view that the demand is not time-barred. In the instant case, penalty was cancelled for the reason that the duty was paid along with the interest before issuing the show cause notice. By mis-interpreting the wordings or law, no benefit can be extended to the appellant."

Concluding that there is no merit in the appeal filed, the same was dismissed.

(See 2018-TIOL-584-CESTAT-MUM)