2014 (9) TMI 222

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....uty prior to issue of Show Cause Notice is sufficient ground for setting aside penalty imposed under Section 11AC in the face of express provisions in Section 11AC providing for mandatory levy of penalty when the conditions specified therein are satisfied? 2. Whether on facts and in the circumstances of the case, the 2nd Respondent was right in law in refraining from imposing equal penalty under Section 11AC, when imposition of penalty under Section 11AC is mandatory from 28-9-96 on the conditions prescribed therein being satisfied viz., suppression of facts with intent to evade duty as in the present case? 3. Whether the 2nd Respondent is right in allowing the appeal filed by the 1st Respondent insofar as imposition of Interest....

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....iod prior to 28-9-1996 and also for interest relating to the said period. 4. The Tribunal after finding that the assessee had paid the duty before issuance of the show cause notice and by observing that the assessee would not be required to pay any penalty or interest, allowed the appeal filed by the assessee and dismissed the appeal filed by the revenue. Aggrieved by the order of the Tribunal, revenue preferred these two appeals. 5. We have heard Mr. P. Mahaadevan, learned counsel for revenue as well as Mr. N. Murali, learned counsel appearing for the assessee. 6. Insofar as the question of payment of penalty is concerned, under Section 11AC of the Act, it has been held by the Hon'ble Supreme Court in the case of Dharamen....

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....ase the Authority concerned would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A". 8. In Paragraph 32 of the said decision, the Hon'ble Supreme Court held as under :- "32. After referring to a number of decisions on interpretation and construction of statutory provisions, in E.L.T. paras 26 and 27 of the decision, the Court observed and held as follows : (Dharamendra Textile case) "19. In Union Budget of 1996-1997, Section 11-AC of the Act was introduced. It has made the position clear, that there is no scope for any discretion. In Para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty....