TaxTMI 
TaxTMI 
2009 (7) TMI 318
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....sited their factory and gathered evidence with regard to duty liability, found that the appellant was not eligible for SSI benefit for the above period as their aggregate value of clearances in the previous year exceeded Rs.300 lakhs which was the maximum limit prescribed under the above notification for a small scale industrial unit to claim the benefit of exemption from payment of duty in the succeeding financial year. The appellant realised their mistake and paid up the duty amount (Rs. 7,40,739/-) on 15-1-2004 and also paid interest thereon under Section 11AB of the Act on 21-1-2004. Later on, the department issued a show cause notice to them in the month of December 2005 asking them to show cause why - (i) the central excise duty amou....
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....present appeal of the assessee. 2. Heard both sides. Reiterating the grounds of the appeal, the learned counsel has submitted that, as the appellant had paid duty with interest prior to issuance of the show cause notice, they were not liable to be penalised under Section 11AC. The learned counsel has sought to amplify the grounds of appeal with reference to the Hon'ble Supreme Court's judgment in UOI v. Rajasthan Spinning & Weaving Mills - 2009 (238) E.L.T. 3 (S.C.). It is argued that, for a penalty under Section 11AC, there should be a determination of duty under sub-section (2) of Section 11A of the Act. According to the learned counsel, in the instant case, there was no such determination of duty by the proper officer of Central Excise ....
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....hrase "whether before or after the show cause notice is issued" used by the apex court. It is argued that, by expressing the above view, their Lordships recognized the legal position that there could be a determination of duty under Section 11A(2) of the Central Excise Act in a case where the amount of duty was paid prior to issuance of show-cause notice. Such is the present case, according to the learned SDR. This point is sought to be elaborated on the strength of Order No. A/215/2009/SMB/C-IV dated 29-5-2009 in appeal No. E/287/08, [Ispat Industries Ltd. v. CCE, Raigad]. The SDR has also claimed support from Viswa Organics Put. Ltd. v. CCE, Indore - 2000 (120) E.L.T. 456 (Tribunal). The point sought to be made by the SDR is that there ca....
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....n also be gathered from certain other parts of the text of the judgment, one of which is para 2. The view expressed by the apex court in para 2 of its judgment in Rajasthan Spinning & Weaving Mills case has already been reproduced in an earlier part of this order. This view was also expressed in the context of interpreting the earlier judgment in Dharamendra Textile Processors case. Therefore, one has got to get at the cumulative effect of the view expressed by the Apex Court in paragraphs 2 and 23 of its judgment in Rajasthan Spinning & Weaving Mills case. In other words, a combined reading is imperative. Proceeding on this basis, I find that the following points can be deduced from the Apex Court's judgment in Rajasthan Spinning & Weaving....
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....llant in the present case and the same was intimated to the proper officer of Central Excise. In the circumstances, there was no reason to issue any show-cause notice to the appellant in respect of the duty paid by them. The above provision, however, does not grant immunity to penalty. Penalty could still be levied in accordance with law. Insofar as a penalty under Section 11AC is concerned, it could be imposed on a person against whom there is determination of duty under sub-section (2) of Section 11A of the Act provided, of course, the ingredients of such penalty are found against him. A determination of duty under sub-section (2) of Section 11A arises only in a case where, under sub-section (1), there is a show-cause notice raising deman....
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....amendment dated 14-5-2003. The period of dispute in this case (April 2003) is covered by the unamended sub-section (2B), which plainly enabled a person chargeable with duty of excise to pay such duty under intimation to a Central Excise officer so that such officer shall not serve any show-cause notice on him in respect of such duty. 7. The learned SDR has laid undue emphasis on the allegdtion of suppression of fact and contravention of rules with intent to evade payment of duty, raised in the show cause notice. Of course, these are ingredients of the cause for penalty under Section 11AC. However, as already held, these are of no avail where the essential pre-requisite for the penalty is missing, which is the determination of duty under su....