TaxTMI 
TaxTMI 
2015 (3) TMI 81
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....mand of Rs. 15,53,996/- under proviso to Section 11A(1) of Central Excise Act and appropriated the entire duty amount already paid by them towards the demand. He also confirmed the reversal of credit of Rs. 1,71,091/- under Rule 57U (2) and vacated the protest of the appellant when they paid the said amount. He imposed penalty of Rs. 8,52,254/- equivalent to the duty payable after 28.9.1996 under Section 11AC and also demanded interest under Section 11AB in respect of duty of Rs. 8,52,254/-. The adjudicating authority also imposed penalty of Rs. 1,63,815/- equivalent to the ineligible credit taken after 28.9.96 under Rule 57U(6) and also demanded interest under Rule 57U(8). He also imposed penalty of Rs. 1 lakh under Rule 173Q of Central Excise Rules. 3. Aggrieved by the aforesaid order, appellant preferred appeal before this Tribunal. The Division Bench of this Tribunal vide Final Order No.1094/2006 dt. 15.11.2006 upheld the demand and set aside the penalties imposed under Section 11AC, 57U and 173Q and also set aside the interest demanded under Section 11AB and under Rule 57U (8) as no penalty can be imposed for the period prior to 28.9.96, the date on which Section 11AC came ....
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....n of facts has been established. Since the appellants have not fulfilled the condition stipulated in Section 11AC, they are not eligible to 25% of penalty paid after receipt of the High Court order. He relied on the following judgements :- (1) CCE Raigad Vs Castrol India Ltd. 2012 (286) ELT 194 (Bom.) (2) CCE Pune Vs SKF India Ltd. 2009 (239) ELT 385 (SC) (3) Union of India Vs Dharamendra Textile Processors 2008 (231) ELT 3 (SC) (4) Arun Vypar Udyog Pvt. Ltd. Vs CESTAT Chennai 2014 (306) ELT 130 (Mad.) 8. I have carefully considered the submissions of both sides and perused the records. This remand proceedings is taken up as the Hon'ble High Court of Madras vide order dt.11.9.2009 allowed the Revenue appeal and set aside this Tribunal's Final Order No.1094/2006 dt. 15.11.2006 and remanded to the Tribunal to consider the penalty imposed under Section 11AC and Rule 57U and the interest demanded under Section 11AB in the light of Hon'ble Apex Court's judgement in CCE Vs SKF India Ltd. 2009 (239) ELT 385 (SC) as the adjudicating authority has imposed penalty under Section 11AC and under Rule 57U only for the period from 28.9.96 when the ....
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....ection 11A, shall, in addition to the duty, be liable to pay interest .......It is thus to be seen that unlike penalty that, is attracted to the category of cases in which the non-payment or short payment etc. of duty is by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of Rules made thereunder with intent to evade payment of duty , under the scheme of the four Sections (11A, 11AA, 11AB & 11AC) interest is leviable on delayed or deferred payment of duty for whatever reasons. 11. The payment of differential duty by the assessee at the time of issuance of supplementary invoices to the customers demanding the balance of the revised prices clearly falls under the provision of sub-section (2B) of Section 11A of the Act. 5. Having regard to the submission made and also in view of the decision of the Supreme Court cited above, the order of the Tribunal set aside and the matter is remitted back for the Tribunal to consider the issue in the light of the above cited Judgment of the Supreme Court." 9. On perusal of the records and the impugned order, I find that the adjudicating authority c....
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....uty was paid prior to issuance of show cause notice does not in any manner advance its case. The question that has to be considered is whether there is intention to evade payment of duty. The period which is subject matter of issue was 2001-02. The Enforcement Wing of the respondent Department visited the appellant s factory on 23-12-2003 i.e., nearly after about two years after the relevant period i.e. 2001-02. In the course of such surprise inspection, the stock was verified and the accounts of the appellant were scrutinized. On such verification and scrutiny, it came to light that the appellant adopted a notional price in respect of consignment sales and they had admitted that there was some delay in receipt of sale patties from the consignment agents and the Director of the Company admitted the liability and accepted to pay the differential duty. The Original Authority after considering the materials placed before him pointed out that as declared in the invoices that the removals specified in the notice are towards consignment agents, the responsibility of paying differential duty lies with the noticee. The Original Authority further pointed out that when the appellant was cons....
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....n 11AC. They produced copy of letter dt. 19.11.99 addressed to Superintendent of Central Excise informing the payment. In the present case, the period involved is 1994-95 to 1998-99 and the impugned OIO passed on 4.2.2000. The Section 11AC as inserted by Finance Act, 1996 w.e.f. 28.9.96 is reproduced below :- "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 short-paid 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 the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty as reduced or increased, as the case may be, shall be taken into account." Subsequently, Se....
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.... (2) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person. As seen from the above, the Section 11AC came into effect from 28.9.96. Subsequently, w.e.f. 12.5.2000, Section 11AC was amended where provisos were inserted extending payment of 25% of penalty. The amended Section 11AC, the 1st and 2nd proviso clearly mandates that appellants shall be eligible for penalty of 25% of the duty determined within 30 days of the communication of the order of the Central Excise Officer determining such duty together with interest payable under Section 11AB also to be paid within 30 days. Whereas in the present case, the appellants have not complied the provisions of Section 11AC as they have not paid the interest demanded under Section 11AB and the reduced penalty within 30 days of the communication of the adjudication order. Appellant's case is not covered under 3rd proviso of Section 11AC as this is not the case when the Tribunal or Hon'ble High court reduced or enhanced the penalty. The Hon'ble High Court in t....
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.... contained in Section 11AC have to be construed strictly and if the assessee fails to comply with the conditions set out in the proviso to Section 11AC, the benefit of paying lesser penalty cannot be extended to the assessee. 25.?If the contention of the assessee that even the appellate authority can direct the assessee covered under Section 11AC to pay 25% of the penalty within thirty days from the date of communication of the order passed by the appellate authority is accepted, then it would defeat the very object with which the incentive under Section 11AC is allowed. The basic object of granting incentive under Section 11AC is to encourage payment of duty sought to be evaded with interest and penalty at 25% within the time stipulated therein. When the legislature specifically fixes the time-limit within which the duty with interest and penalty at 25% is to be paid for availing the incentive, it would neither be open to the appellate authority nor any other authority to permit the assessee to pay 25% penalty at any time other than the time prescribed under Section 11AC. 26.?By comparing Section 11AB with Section 11A(2B) and (2C) and also by referring to Section 11AC as sub....
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....late proceedings and not in any other cases. Therefore, when the liability to pay 25% penalty under the first and the second proviso to Section 11AC is required to be paid within thirty days from the date of communication of the order the Central Excise Officer determining duty under Section 11A(2), it would not be open to the appellate authority or the Court to direct the assessee to pay 25% penalty beyond the date stipulated in the first and the second proviso to Section 11AC. For all the aforesaid reasons, we find it difficult to endorse the contrary views expressed by the Delhi High Court, P & H High Court and the Gujarat High Court in the cases referred to by the counsel for the assessee. 28. In the present case, the applicability of Section 11AC is not in dispute. It is also not in dispute that the assessee has paid the duty sought to be evaded as also the interest payable thereon under Section 11AB before the passing of the adjudication order. Admittedly, the assessee has not paid 25% of the penalty imposed under Section 11AC within thirty days from the date of the communication of the order of Central Excise Officer determining the duty sought to be evaded under Section ....