TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 990
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....irmed against M/s Bhagwati Steel Cast Ltd., who paid the such amount along with 25% of penalty under Section 11A(2A) of the Central Excise Act. They did not file any appeal against the said order. A penalty of Rs. 1 lakh each was imposed on Shri Mahendra K Agarwal, MD; Manish Rr Agarwal - broker and M/s Diamond Roadways and Rs. 25,000/- on Shri Ramavtar Agarwal. All these penalties were imposed under Rule 26 of Central Excise Rules, 2002. 2. Nobody appeared for M/s Diamond Roadways. 3. Learned Counsel for the appellant namely, Shri Mahendra K Agarwal, Manish R Agarwal and Ramavtar Agarwal argued that the main appellants had paid the duties and 25% of penalty and therefore, in terms of provisions of sub-section (2A) of Se....
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....pellant namely, Diamond Roadways, wherein the penalty under Rule 26 has been upheld in similar circumstances. 5. I have gone through the rival submissions. I find that the issue regarding sub-rule (2) of Rule 26 raised by the learned Counsel is irrelevant as Rule 26 has been invoked and not sub-rule 2 of Rule 26. As regards non-imposition of penalty in case where there is no proposal for confiscation of goods, the Hon'ble Supreme Court in the case of Sanjay Vimalbhai Deora (supra) has upheld the decision of Hon'ble High Court of Gujarat. In the said case, the Hon'ble Supreme Court had upheld the penalty under Rule 26 of the Central Excise Rules, 2002 even in case where there is no proposal for confiscation. The third cont....
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....ection (2) of Section 11 makes it very clear that the said provisions are applicable in respect of persons to whom notice stands issued under sub-section (1) of Section 11A. Notice under sub-section 1 of Section 11A is issued to a person who has either not paid the duty or short-paid the duty. As such notice to sub-section (1) of Section 11 is issued to a manufacturing unit or a person who is required to pay-duty but has not paid the duty. Notice under sub-section (1) of Section 11 cannot be issued to independent persons who are authorised representatives of manufacturing units inasmuch as such authorised representatives are under no obligation to pay any duty of excise and as such the question of short-payment or non-payment of duty does n....
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....anufacturing unit. As such analyzing the proviso to sub-section (2) of Section 11A, it becomes clear that the proceedings are deemed to be conclusive only in respect of such person who discharges his duty liability in terms of sub-section (1A) or to whom notices stands served under sub-section (1). 7. Referring to the provisions of Rule 26 of Central Excise Rules, 2002, it is seen that the same prescribes for imposition of penalty in certain circumstances. For better appreciation, the said rule is re-produced below:- "RULE 26. Penalty for certain offences - (1) Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals w....
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....guage used would have been simpliciter "in respect of all persons". 9. I may here discuss the Board's circular relied upon by Commissioner (Appeals). Para 2 of Circular No. 831/08/2006-CX, dated 26-7-2006 reads as under :- "2. Section 11A of the Central Excise Act, 1944 has been amended to introduce an optional scheme for enabling voluntary payment of duty by assessees in full or in part in cases involving fraud, misstatement etc. along with interest and 25% of the duty amount as penalty within 30 days of the receipt of the show cause notice thereby dispensing with the rigours of adjudication procedure. This is an additional facility given to the Trade to settle the dispute at an early stage to reduce litigation and also aid in collectio....