TaxTMI 
TaxTMI 
2012 (10) TMI 78
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....ri Shantilal Chaganlal Khatrani (x) Appeal No. E/1466/10 Shri Pankaj Kumar V. Vasania (xi) Appeal No. E/1467/10 Shri Aziz A. Thehraa (xii) Appeal No. E/1470/10 Shri Rajkumar Gupta (xiii) Appeal No. E/1473/10 Shri Suryakant Annur Chauhan 2. The relevant facts that may arise for consideration are that appellant No. 1 M/s. Sonam Clocks Private Limited (hereinafter referred as SCPL for short) are engaged in the manufacture of Quartz Analog Wall Clocks, falling under Chapter 91.05 of the first schedule of Central Excise Tariff Act, 1985. During the search operation by the preventive officers of Central Excise in their factory on 27/28-9-2006, various incriminating documents indicating unaccounted clearances of finished goods were recovered. It was noticed that the said clearances were carried out without payment of duty and the same was admitted by the Chairman and Managing Director of M/s. SCPL. Investigation was carried out by the authorities which culminated into issuance of show cause notice dated 23-6-2008, wherein demand of duty on the clandestinely removed goods was made along with interest, and proposal for imposing penalties were made in t....
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....ly; The provisions of Central Excise Act are supposed to be followed by the assessees and department's role is administering the said act. It is his submission that nowhere in the said Act the responsibility is cast upon the department to educate the assessees about the statutory provisions and the defences available to the assessee. It is his submission that the provisions of sub-section 11A(1A) and (2) was in the statute books from 13-7-2006 and it was for the assessee to represent to the authorities if they were willing to accept the fact of evasion of duty to the extent acceptable to them. He would submit that the benefit of provisions would automatically be available to them, but was conditional subject to accepting the liability by way of representation to the adjudicating authority. It is his submission that in this case, no such representation was ever made by M/s. SCPL. It is his submission that this representation cannot be considered as not done because of ignorance of law, it has been held by various judicial forums that ignorance of law is of no excuse. He would rely upon the following decisions :- (a) R.G. Nagori & Sons v. C.C.E. - 1989 (39)....
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.... i.e. benefit of provisions of law as it stands in the statute on the date of appeal before us. This, being a substantial question of law, it can be raised before this Tribunal even if it was not raised before the lower authorities. This Tribunal is competent to decide the issue on the question of law as it is in the statute books, even it is not raised before the lower authorities. In view of this, the objection raised by the learned SDR on this point, is rejected and we take up the appeal. 8. In order to appreciate the correct duty liability, we reproduce the paragraph 10.6 of the impugned order, which is as under :- "10.6. Taking into consideration the combined reading of all the above, I find that the Transaction value arrived at is cum duty price and the same is required to be recalculated by the Lower Authority while assessing the Central Excise Duty on valuation done under Section 4 of CEA and the revised demand to that extent is upheld and the remaining amount is set aside. The Lower Authority should recalculate the duty and inform the appellant No. 1 in writing within 15 (fifteen) days from the receipt of this Order in Appeal. The revised amount is treated ....
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....at where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent, of the duty so determined :] 10. On perusal of the provisions of sub-section (1A) we find that the same gives a person an option to pay the duty in full or in part as may be accepted by him, interest payable thereon under Section 11AB of Central Excise Act, 1944/Section 28AB of Customs Act, 1962 and 25% of the accepted duty demand as penalty, within 30 days of the receipt of the show cause notice, under the provisos to sub-section (1) of Section 11A of the Central Excise Act/Section 28 of Customs Act. 11. As per the first proviso to sub-section (2), that duty with interest and penalty under sub Section (1A) is paid within stipulated period of 30 days, the proceedings in respect of such person and other persons to whom the notice is served under Section (1), shall, without prejudice to the provisions of sections 9, 9A, 9AA of ....
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....Del.) held that failure of the person to pay reduced penalty amount, within 30 days of the adjudication order, cannot be held against him, and directed that adjudicating authority under the act should explicitly state the option available to the person under Section 11AC of the Act. Once the choices are made known to the person and said person still does not take advantage of the option available, it would be entirely at its own peril. The Hon'ble High Court found it beneficiary, both from the point of view of the Revenue as well as the assessee, if the option available is mentioned explicitly. The said judgment is being consistently followed by the various High Courts as well as by this Tribunal in the following cases :- (a) C.C.E., Rohatak v. J.R. Fabrics Pvt. Limited - 2009 (238) E.L.T. 209 (P & H) (b) Rina Dyg. & Ptg. Works v. C.C.E., Surat - 2009 (247) E.L.T. 616 (Tri.) (c) K.P. Fragrances v. C.C.E., Bhopal - 2010 (262) E.L.T. 282 (Tri.-Del.) (d) Hari Kewal Vanaspati Mills v. C.C.E., Rohatak - 2010 (262) E.L.T. 331 (Tri.-Del.) (e) C.C.E., Trichy v. Home Fa....
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....umstances of the case the Tribunal has committed substantial error of law in reducing penalty to 25% of the duty amount on the respondent ?" After considering the submissions made by both sides before the Hon'ble Court, their Lordhsips, while answering the question of law, has held as under :- "10. ................... ...................It is also important to note that the adjudicating authority has not calculated the interest neither in the order-in-original nor even thereafter. It is, therefore, too much to expect from the respondent-assessee to pay the interest along with the duty amount in absence of such calculation of interest. As far as statutory obligation of the adjudicating authority is concerned, the Central Excise Department itself has issued Circular on 22-5-2008 wherein it is clarified that in all cases wherein penalty under Section 11AC of the Act is imposed the provisions contained in the first and second proviso of Section 11AC should be mandatorily mentioned in the order-in-original itself by the adjudicating authority. It is, therefore, not open for the revenue to agitate this issue before the Court in contradiction of the Circular issued ....