AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2007 (6) TMI 3
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....1A(1), it has been placed before this Larger Bench, since the Division Bench was of the opinion that it was required to be heard by a Larger Bench. 2. The Division Bench had earlier by its order dated 11-8-2004 set aside the order of the Commissioner (Appeals) by which it was held that the duty demand was time-barred and the duty of Rs. 73,042/- against the respondents was confirmed. However, keeping in view the facts and circumstances of the case, the Tribunal reduced the penalty of the like amount of Rs. 73,042/-, which was imposed by the adjudicating authority under Section 11AC, to Rs. 10,000/-. Admittedly, the respondents did not prefer any appeal against the order of the Tribunal by which the duty was confirmed and the reduced penalty of Rs. 10,000/- was imposed on them. The Revenue, however, preferred an appeal before the Hon'ble the High Court against the order of reduced penalty on the ground that only penalty equal to the duty confirmed could be imposed under Section 11AC of the Act. 3. The adjudicating authority had, on facts, come to a finding that the respondent was manufacturing and clearing "pulsator", which was a tariff item classifiable as a part of washing machi....
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....e years was invocable under Section 11A of the Act. The duty demand of Rs. 73,042/- was, therefore, confirmed against the company and penalty of the like amount was imposed on it, under Section 11AC of the said Act, besides the penalty of Rs. 10,000/- imposed under Rules 173Q and 209 of the erstwhile Rules read with Section 38A of the said Act. 4. The Appellate Commissioner noted that there were two issues to be decided in the appeal preferred by the present respondent, namely, whether the cost of bush received free of cost to be fitted in the pulsator manufactured by the assessee was includible in its assessable value while clearing it on payment of duty, to the user of pulsator and, whether the demand raised was hit by limitation period under Section 11A of the Act. The Appellate Commissioner rejecting the plea of the assessee on the merits of the demand held, in Paragraph 6 of the impugned order that the value of bush was includible in the value of pulsator for the purpose of determination of the assessable value. However, on the question of invocation of the extended period of limitation, the Appellate Commissioner, simply observing that the contentions of the assessee had for....
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....ator. It was, therefore, held that, the extended period of limitation for raising the duty demand had been correctly invoked against the respondents. The order of the Commissioner (Appeals) was, therefore, set aside and the duty demand confirmed and penalty reduced from the like amount of Rs. 73,042/- to Rs. 10,000/- 6. Admittedly, the respondent had accepted the order of the Tribunal by not challenging it. However, the Revenue had challenged the said order dated 11-8-2004 to the extent that it imposed a reduced penalty of Rs. 10,000/- as against the penalty of Rs. 73,042/- originally imposed by the adjudicating authority being the amount equal to the duty demand confirmed. Obviously, therefore, the order of the remand that has been made by Hon'ble the High Court for reconsidering the question of penalty has to be viewed in the background of the fact that the rest of the order, which was against the respondents was never challenged and had, therefore, become final. 7. The Hon'ble the High Court of Punjab and Haryana by its orders dated 21-7-2006, while setting aside the said order of reduced penalty imposed by the Tribunal in the appeal which was filed by the Revenue, has remande....
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....000/- under Section 11AC as against the duty demand of Rs. 73,042/-, which was confirmed, only that part of the order was challenged in the appeal of the Revenue on the ground that the penalty equal to the duty determined, i.e., Rs. 73,042/- was required to be imposed and that the provisions of Section 11AC did not warrant any such reduction. Since Hon'ble the High Court has directed that the Tribunal should give a fresh decision on the question of levy of penalty and that if it is held that levy of penalty is warranted having regard to the requirements of the statute, the Tribunal will be bound to levy penalty equal to the amount of duty, this Tribunal is required to consider afresh even the question whether the penalty was warranted. 9. The learned Authorized Representative for the department has in the above background contended that, the scope of the remand proceedings has been limited by the aforesaid directions of the Hon'ble High Court to Section 11AC which leaves no discretion in the matter, and that, the amount of penalty equal to the duty confirmed was required to be restored. It is submitted that, prior to 12- 5-2000, Section 11AC left no scope for any discretion while ....
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....ier dated 11-8-2004 that the extended period of limitation for raising the duty demand, has been rightly invoked against the respondents, has been completely wiped off the record and does not remain alive, notwithstanding the fact that the respondent-manufacturer had not challenged that finding by way of any appeal/cross-objection before the Hon'ble High Court. It was submitted that penalty could be imposed only if the proposed demand was sustainable. Reliance was placed on the decision of the Hon'ble the Supreme Court in International Auto Ltd. v. CCE reported in 2005 (183) E.L.T. 239 (S.C.) in support of this contention. It was submitted that the order of the Commissioner (Appeals) relating to merits was not appealed against before the Tribunal, as the respondent was not aggrieved by that order because the order-in-original had been set aside on the issue of limitation. The learned authorized representative placed reliance on the decision of the Rajasthan High Court in CCE, Jaipur v. Banswara Syntex Ltd. reported in 2007 (212) E.L.T. 171 (Raj.) 2007 (6) S.T.R. 209 (Raj.), in which it was held that on a combined reading of the provisions of Rule 173Q and Section 11AC it was clear ....
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....warranted would depend upon the finding whether the evasion of duty was due to fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade payment of duty, as contemplated by Section 11AC of the Act. The provisions of Section 11AC, as they stood prior to the amendment made on 12-5-2005, read as under :- "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 in tent 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 in creased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be the court, then, for the purposes of this section, the duty a....
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....he President. (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] 13.2 Since the period of demand was from 1998-1999 to 2000-2001, Section 11AC, as it stood prior to the amendment from 12-5-2000, will apply for the period from 28-9-1996 to 11-5-2000 while for the period from 12-5-2000 covered under the demand notice, the amended provisions of Section 11AC will apply. 14. Both under the pre-amended and amended provisions of Section 11AC, penalty can be imposed only where the duty evasion was caused by reason of fraud, collusion, or wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or the Rules, with intent to evade payment of duty. From the material on record, it clearly transpires that the respondent-assessee was clearing its product-"pulsator" without adding the value of "bushes", which were supplied to it, and was paying duty only on the "pulsators" manufactured by it. It has come on record that Shri H.D. Sharma, Assistant Manager (Excise and Stores) of th....
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.... have effect as if, for the words, one year the words 'five years' were substituted." 14.1 It is obvious that when the ingredients laid down in the proviso of Section 11A (1) for invoking the extended period of limitation and in Section 11AC for imposition of penalty are identical in a case where these ingredients are satisfied for invoking the extended period of limitation, that very finding will enure for the purpose of imposing penalty under Section 11AC In other words, there can be no warrant for holding that though there is fraud or suppression or violation of the provisions of the Act or the Rules with intent to evade duty so as to justify invoking the extended period of limitation notwithstanding such finding, penalty may not be imposed under Section 11AC. On the same facts and in the same case, there would be no warrant for ignoring the findings reached for the purpose of invoking the extended period of limitation, while deciding the question of penalty under Section 11AC We therefore bold that on the established facts of the present case, the imposition of penalty under Section 11AC of the Act is clearly warranted. 15. Once it is held that imposition of penalty under Sec....