There is a sole-proprietorship concern where excisable goods are manufactured.
There was a routine audit from Central Excise Department for years 2006 to 2010. Income tax audit had already been done for those years.
They found some goods which were sold as free for sales promotion without payment of excise duty for year 2008-2009 and claimed Rs 72,000 as duty, Interest at 13% would be applicable. Now they are demanding that PENALTY would also be attracted @ 25% for every 30 days.
But these type of audits were done before too where they have paid only duty along with interest but NO PENALTY. So how come they demand penalty now with this audit? or are these officers just bluffing?
I would be greatful if learned professionals point me to the provisions and whether their claim for penalty is legal,
CAclubindia
