2009 (6) TMI 788 - AT - Central Excise

Tribunal overturns order, waives penalties, emphasizes intent for penalties under Central Excise Act

The Tribunal set aside the impugned order, waived penalties, and remanded the case to the Commissioner (Appeals) for reconsideration, emphasizing the ... Penalty - Mandatory penalty Issues:Waiver of penalties under Section 11AC of the Central Excise Act based on suppression of facts with intent to evade payment of duty.Analysis:The judgment involved multiple applications/appeals against a common impugned order seeking waiver of penalties imposed under Section 11AC of the Central Excise Act. The applicants contended that the impugned order did not establish that they suppressed facts with intent to evade duty. They referenced the decision of the Hon'ble Supreme Court in the case of Dharamendra Textiles Processors v. Union of India and Union of India v. Rajasthan Spinning & Weaving Mills to argue that the adjudicating authority lacked discretion to impose a penalty lesser than the demand. The Revenue reiterated the findings of the Commissioner (Appeals).Upon examination, the Tribunal found that the impugned order did not establish that the applicants suppressed facts with intent to evade duty. Citing the Supreme Court's decision in the case of Rajasthan Spinning & Weaving Mills, the Tribunal highlighted that penalty under Section 11AC is a punishment for deliberate deception by the assessee to evade duty. As there was no finding of deliberate intention to evade duty in the impugned order, the matter required reconsideration by the Commissioner (Appeals). Consequently, the Tribunal set aside the impugned order, waived the pre-deposit of penalties, and remanded the matters to the Commissioner (Appeals) for a fresh decision after providing both parties with an opportunity to be heard.In conclusion, the judgment emphasized the importance of establishing deliberate intent to evade duty for the imposition of penalties under Section 11AC of the Central Excise Act. The Tribunal's decision to remand the matters for reconsideration by the Commissioner (Appeals) underscored the need for a clear finding regarding suppression of facts with intent to evade payment of duty before imposing penalties.