2006 (7) TMI 504

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.... assessee in adjudication of a Show-cause notice issued by the Department beyond the normal period prescribed under Section 11A(1) of the Central Excise Act. The respondents were found to have suppressed the material facts relating to the subject goods from the Department and accordingly the larger period of limitation under the proviso to Section 11A(1) was invoked against them for the demand of duty on the said goods. The demand on the respondents in appeal No. E/441/03 amounts to Rs. 3,30,117/- which is for the period 1995-96 to 1998-99. Show-cause notice to them was issued on 25-10-2000. The demand on the respondents in the other Appeal is to the tune of Rs. 31,69,507/- and the same is for the period 1995-96 to 1999-2000. In this case, ....

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.... SDR has reiterated this ground of the appellant. 3. Ld. Counsel for the respondents submits that in a case like this involving interpretation of Notifications, it is not correct to invoke Section 11AC for imposing penalty. In this connection, reliance is placed on the Tribunal's decision in the Prem Pharmaceuticals Ltd. v. CCE [2004 (172) E.L.T. 273 (T)], wherein a penalty imposed on the part under Section 11AC was set aside on the ground that the dispute in the case involved interpretation of the scope of exemption Notifications. Ld. Counsel has also relied on the Supreme Court's judgment in CCE, Delhi v. Dabur (India) Ltd. [2005 (182) E.L.T. 289 (S.C.)]. As regards interest on duty under Section 11AB, there is no serious contest. ....

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....misstatement of relevant facts by the party. This would indicate that the proviso to Section 11A(1) was not invoked in that case for demanding duty from the party. Hence the said decision is not much of aid to the respondents in these appeals. However, in the case of Prem Pharmaceuticals (supra), one of the considerations for the Tribunal to vacate .penalties under Section 11AC and Rule 173Q was that the case involved interpretation of the scope of exemption Notification. We find that a similar consideration has worked with the adjudicating authority in the present case also, though for a wrong purpose. Such considerations are not to be applied for dropping a penalty which is mandatory under law. However, such considerations would be german....