2009 (8) TMI 528 - HC - Central Excise

Appeal Dismissed: Penalty Exemption under Central Excise Act Section 11A(2B)

The High Court dismissed the appeal concerning the exemption of penalty under Section 11A(2B) of the Central Excise Act, 1944. The penalty of Rs. 2 lakhs ... Penalty- The Tribunal has deleted the penalty of Rs. 2 lakhs on two grounds. Firstly that the amount of duty sought was voluntarily deposited by the assessee much before the show cause notice was issued and secondly there was no intentional suppression of facts. Held that- all the question raised by the revenue is not the question of law thus appeal fails and is hereby dismissed. Issues:1. Exemption of penalty under Section 11A(2B) of the Central Excise Act, 1944 when duty was paid before enactment of Finance Bill, 2001.2. Exemption of penalty under Section 11A(2B) of the Central Excise Act, 1944 when duty was short paid due to suppression of facts.The High Court considered the appeal where the Tribunal had removed a penalty of Rs. 2 lakhs on the grounds that the duty amount was voluntarily deposited by the assessee before the show cause notice and there was no intentional suppression of facts. The Revenue raised two questions regarding the exemption of penalty under Section 11A(2B) of the Central Excise Act, 1944. The first question related to duty payment before the enactment of the Finance Bill, 2001, while the second question concerned duty short payment due to suppression of facts. The Court noted that the first question was of academic interest only, as the penalty had been deleted based on the absence of intentional suppression of facts. Therefore, the Court declined to admit the appeal on the first question. The second question was based on the Tribunal's findings on evidence and material on record, making it not a question of law. Consequently, the appeal was dismissed.In summary, the judgment focused on the exemption of penalty under Section 11A(2B) of the Central Excise Act, 1944 in two scenarios: duty payment before the Finance Bill, 2001 enactment and duty short payment due to suppression of facts. The Court emphasized that the absence of intentional suppression of facts led to the penalty deletion, rendering the first question pertaining to duty payment before the Finance Bill enactment as of academic interest only. The second question, based on the Tribunal's factual findings, was not considered a question of law. Ultimately, the appeal was dismissed based on these considerations.