TaxTMI 
TaxTMI 
TaxTMI 
2014 (3) TMI 420
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.... that the respondent is engaged in the manufacturing of "Portable Gen Sets & Parts thereof". For the period of July, 2010 to February, 2011, the respondent admittedly has furnished the returns as required under Rule 8 but has not deposited the amount of duty amounting to Rs. 11,97,798/-. The said amount of duty has been deposited along with interest at Rs. 39058 vide challans dated 11.3.2011. The Assistant Commissioner initiated the penalty proceedings and has levied the penalty at Rs. 11,97,798/- under Section 11 AC read with Rule 25 and further levied penalty at Rs. 5,000/- under Rule 27. Being aggrieved by the order of the Assistant Commissioner, the respondent filed the appeal before the Commissioner (Appeals), who has allowed the appeal in part vide order dated 28th February, 2013. The Commissioner (Appeals) has deleted the penalty under Rule 27 and has reduced the amount of penalty levied under Section 11 AC read with Section 25 to the extent of 25% of the penalty imposed. Being aggrieved the respondent filed the appeal before the Tribunal. The Tribunal observed that the respondent has deposited the duty along with interest. The delay was caused on account of inability of ....
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....ny of the provisions of these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty, then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse 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." The said rule came up for consideration before the tribunal in the case of Saurastra Cement Ltd. Vs. CEE (supra). The tribunal has observed in paragrap....
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....s determined under subsection (2) of Section 11AC, shall also be liable to pay a penalty equal to the duty so determined. For the purpose of invoking section 11AC of the Act, the condition precedent is that the duty has not been levied, or paid or short- evied or short-paid or the refund is erroneously granted by reasons of fraud, collusion or any wilful misstatement or suppression of facts. If these ingredients are not present, penalty under section 11AC cannot be levied. Since Rule 25 can be invoked subject to the provisions of section 11AC of the Act, as a natural corollary, the ingredients mentioned in section 11AC are also required to be considered while determining the question of levying of penalty under Rule 25 of the Central Excise Rules." There is no dispute that against the order of the Gujarat High Court in the case of Commissioner of Central Excise vs. Saurashtra Cement Ltd., referred herein above, the Special Leave Petition filed by the Commissioner of Central Excise, has been dismissed. This issue has come up before the Andhra Pradesh High Court in case of Commissioner of C. Ex. Guntur Vs. Andhra Cements Limited (Supra) wherein the Court has taken the view that as ....
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....uty had been paid along with interest even before the issuance of the show-cause notice. The appellate authority had also found absence of any intention to evade payment of duty. The Court, therefore, took the view that the orders of penalty were not sustainable and rightly interfered with by the learned single judge. Even in the case of Supreme Industries Limited Vs. C.E.S.T.A.T., New Delhi (Supra), the Madhya Pradesh High Court took the view that enforcement of penal clause to be done subject to strict proof of intention to evade payment of duty. In the case before the Madhya Pradesh High Court, there was no material to show that there was intention to evade duty. The goods manufactured were not subject to quality control test and were kept on hold. The goods were to be cleared by quality control department and only thereafter were to be sent to packing department after quality control test was concluded. Merely because in statement, the Commercial Manager of petitioner in that case has stated that goods were manufactured, that by itself cannot be a ground for holding that goods were ready for despatch to customer. The Court, therefore, took the view that confiscation and penalt....