TaxTMI 
TaxTMI 
2014 (12) TMI 654
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....ispute is from 1995 to 1996 to 1999-2000. It is settled law that Section 11AB which pertains to interest cannot be invoked for the period prior to the enactment of Finance Bill, 2001? and 3. Whether the 1st respondent Tribunal ought to have considered that penalties were imposed under Rule 173Q and did not call for a consequential imposition of penalty under Section 11AC?" 2. When the matter was called on 06.11.2014, it was submitted by Mr.Muthuvenkataraman, learned counsel that he is going to file vakalat for the appellants. Hence, the matter was adjourned. Again when the matter was called on 21.11.2014, the said counsel has not filed vakalat. Hence this Court directed the Registry to print the name of the appellant and post the matter on 27.11.2014. This Court also observed that in the meanwhile, if the counsel is able to file vakalat, he is entitled to pursue the matter or otherwise the Court will decide the matter based on the relevant records. Today (27.11.2014), when the matter was called, none appears for the appellant and the above-said counsel has not filed vakalat so far. Hence, after hearing the learned standing counsel appearing for the Department and after perusi....
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....stwhile Central Excise Rules, 1944, Rule 25 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act, 1944. (v) I also impose a penalty of Rs. 5,000/- (Rupees five thousand only) each, on M/s.Hind Amylose Products, M/s.Indo Chem & Co., M/s.Indo Organic & Chemicals and M/s.M.S.Traders under Rule 209A of the erstwhile Central Excise Rules, 1944, Rule 26 of the Central Excise Rules, 2002 read with Section 38A of the Central Excise Act 1944." 5. Similarly, in respect of Indochem & Co., (appellant in C.M.A.No.273 of 2007) the Adjudicating Authority passed the following order: "(i) I confirm and demand duty of Rs. 3,30,117/- (Rs.Three Lakhs Thirty Thousand One Hundred and Seventeen Only) from M/s.Indo Chem & Co. for the clearances effected during the period from 1995-96 to 1999-2000 and covered under show cause notice vide C.No.V/35/15/131/2000 Cx.Adj. dated 25.10.2000 under Rule 9(2) of the erstwhile Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944 read with Section 38A of the Central Excise Act, 1944. (ii) I appropriate a sum of Rs. 77,814/- already paid in this regard by the noticee vide TRS challan No.1 dated 11.....
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.... of M/s.Indo Chem & Co. 8. Aggrieved by the said order of the Tribunal, the appellants are before this Court contending that the order of the Original Authority is correct and penalty under Section 11AC of the Central Excise Act ought not to have been imposed, since it pertains to interpretation of notification and consequently, interest under Section 11AB of the Central Excise Act is not maintainable. 9. Before going into the merits of the case, for better clarity, we extract hereunder the relevant provisions, namely, 11AC and 11AB of the Central Excise Act. "SECTION 11AC. Penalty for short-levy or non-levy of duty in certain cases. Where any duty of excise has not been levied or paid or has been short-levied or shortpaid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined : Provided that where such duty as determined under sub-secti....
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....he time being fixed by the Central Government, by notification in the Official Gazette, from the first date of the month succeeding the month in which the duty ought to have been paid under this Act, or from the date of such erroneous refund, as the case may be, but for the provisions contained in sub-section (2), or sub-section (2B), of section 11A till the date of payment of such duty : Provided that in such cases where the duty becomes payable consequent to issue of an order, instruction or direction by the Board under section 37B, and such amount of duty payable is voluntarily paid in full, without reserving any right to appeal against such payment at any subsequent stage, within forty-five days from the date of issue of such order, instruction or direction, as the case may be, no interest shall be payable and in other cases the interest shall be payable on the whole of the amount, including the amount already paid. (2) The provisions of sub-section (1) shall not apply to cases where the duty had become payable or ought to have been paid before the date on which the Finance Bill, 2001 receives the assent of the President. Explanation 1. - Where the duty determined to b....
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....e plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff s case (supra) was not correctly decided but Chairman, SEBI s case (supra) has analysed the legal position in the correct perspectives. The reference is answered. The mater shall now be placed before the Division Bench to deal with the matter in the light of what has been stated above, only so far as the cases where challenge to vires of Rule 967Q(5). In all other cases the orders of the High Court or the Tribunal, as the case may be, are quashed and the matter remitted to it for disposal in the light of present judgments. Appeals except Civil Appeal Nos. 3388 of 2006, 3397 of 2003, 3398-99 of 2003, 4096 of 2004, 4316 of 2007, 4317 of 2007, 5277 of 2006, 675 of 2007, 1420 of 2007 and appeal relating to SLP (C ) No.21751 of 2007 are allowed and the excepted appeals shall now be placed before the Division Bench for disposal." 12. This decision was rendered by the Supreme Court on 29.9.2008. At the time of admission of these appeals, this Court did not have the benefit of this decision. Apparently, the Tribunal was also deciding the issue on the basis of law that was prevailin....
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....so have to notice the scope of penalty under Rule 173Q of the Central Excise Rules and Section 11AC of the Central Excise Act on the basis of the decision of the Supreme Court in the case of Zunjarrao Bhikaji Nagarkar Union of India & Ors reported in 1999 (112) ELT 772, wherein the Supreme Court held as follows: "21. Two principal issues arise for our consideration : (1) if levy of penalty under Rule 173Q was obligatory and (2) was there enough background material for the Central Government to form a prima facie opinion to proceed against the officer on the charge of misconduct on his failure to levy penalty under Rule 173Q. Appellant has contended that it is only now after insertion of Section 11AC in the Act that levy of penalty has become mandatory and that it was not so under Rule 173Q. This contention does not appear to be correct. In both Rule 173Q and Section 11AC the language is somewhat similar. Under Rule 173Q such goods shall be liable to confiscation and the person concerned shall be liable to penalty not exceeding three times the value of excisable goods or five thousand rupees whichever is greater. Under Section 11AC the person, who is liable to pay duty on the exc....