TaxTMI 
TaxTMI 
2010 (11) TMI 298
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....hs, it was revealed that the assessees had not discharged the duty liability for the second fortnight of December 2002 and January 2003 which they were required to discharge by 5th of January and 5th of February respectively. The total central excise duty so defaulted was Rs. 10,30,959/-, out of which some of Rs. 8,22,270/- pertain to December, 2002 and the balance pertain to January 2003. In fact, the said amount was not paid to the Government, though it was collected by the assessees from their buyers. On that ground, a show cause notice dated 30-12-2003 came to be issued to the assessee, which was contested by the assessees. 4. It is the case of the assessee that on account of deterioration of the financial condition of the assesee they had to put their mill for sale and it was accordingly sold. The required amount of duty was deposited by them on 9-3-2004 and also an amount of Rs. 1,80,796/- was also deposited on 18-3-2004 towards the interest payable on the said amount. Since the duty amount had already been paid with interest, there could not be imposition of the penalty. 5. The adjudicating authority by its order dated 21-5-2004 rejected the contentions sough....
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....e ground that the assessee inspite of having collected the duty amount from their buyers had not paid the same to the Government and this apparently disclosed intention to evade the payment of duty and, therefore, according to the DR the authority below was not justified in reducing the penalty which was imposed by the adjudicating authority. In that regard, attention is drawn to the findings arrived at by the adjudicating authority in its order. 9. The adjudicating authority after hearing the parties had arrived at the finding that the assessee's contention that their financial position was deteriorated and as such they could not deposit the duty amount was not tenable as the assessee had collected the value and the duty of the goods sold to their buyers at a time of sale itself was never challenged by the assessee before the Commissioner (Appeals). In fact, even in the course of the argument before the Tribunal no grievance is made regarding the said finding. The same apparently disclosed that even though the assessees were fully conscious and aware that they were collecting the amount which was payable to the Government as the duty, and they having collected the said amo....
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....ed in payment of duty to the tune of Rs. 10,30,959/-. It was also stated that the assessee had not paid the said amount even though they had collected the same from their buyers. Obviously, therefore, the basic facts which were necessary to disclose the intention of the assessee to evade the payment of duty so as to warrant imposition of penalty were clearly stated in the show cause notice. 12. In response to the said show cause notice, the assessees filed their reply on 31-3-2004 after payment of the amount demanded under the show cause notice with the specific defence that they could not pay the amount on account of financial difficulties. In other words, the fact that they had collected the duty amount from their buyers and yet they had not paid the same even though they were required to pay the same by 5th of January and 5th of February 2003 was neither disputed nor denied. Nothing was disclosed which could reveal absence of intention to evade payment of duty. We are fully conscious that the burden of proof to establish intention lies initially upon the department. But this burden can be discharged not only on the basis of the averments made in the show cause notice but also....
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....rehouse or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c ) or clause (d) has been committed, or [rupees two thousand], whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice". 15. As already stated above the para 3 of the show cause notice apparently refers to the accusation against the assessee regarding the contravention of the provisions of Rule 8 on account of non-payment of duty which was recoverable under Rule 8(3) of the said rules. As already stated above, the above statement in para 3 of the show cause notice was proceeded by the facts based on which the said statement in para 3 was made. Apparently, therefore, the provisions of Rule 25 comprised under clause (d) were clearly attracted. Clause (d) of Rule 25 relates to contravention of any of the provision of the said Rules with intention to evade payment of duty. Para 2 and 3 of the show cause notice not only disclosed the basic facts but also sp....
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....oses that in case of failure to comply with the requirements of the said rule which results in default by the assessee, the consequences stipulated under the statute are bound to follow and they include imposition of penalties. Being so, the relevant provision in that regard is very clear which needs no further elaboration. We do not find any substance in the contention sought to be raised on behalf of the assessee. 19. In Kitply Industries case, the Tribunal while observing that there was bona fide mistake on the part of the assessee had held that the provisions of Section 11AC of the Central Excise Act, 1944 were not attracted. Obviously, in case of bona fide mistake on the part of the appellants, question of intentional evasion of duty does not arise, however, in the case in hand, as already seen above, there was any bona fide mistake in non-payment of duty. They had not only collected the duty but the same was payable by specified time i.e., 5th of January and 5th of February. They did not pay the same till the show cause notice in that regard was received. 20. Perusal of the impugned order passed by the Commissioner (Appeals) apparently discloses that the lower....