TaxTMI 
TaxTMI 
2018 (8) TMI 1574
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....r, cleared an excess quantity of 877.65 MTs of Bitumen without payment of duty which was noticed on inspection and scrutiny of records by the officers. Show cause notice was issued proposing to demand duty of the excess quantity of Bitumen supplied by the appellants over and above the quantity prescribed in the certificates along with interest and also for imposing penalties under section 11AC of the Central Excise Act. After due process of law, the original authority confirmed the demand of Rs. 11,59,054/- along with interest and imposed equal penalty under section 11AC of the Act. In appeal, Commissioner (Appeals) though confirmed the demand, set aside the interest as well as the penalty imposed under Section 11AC ibid. The department filed appeal before the Tribunal and the matter was remanded by the Tribunal to the Commissioner (Appeals). Thereupon, the Commissioner (Appeals) has passed the order impugned herein wherein the interest as well as the equal penalty imposed under section 11AC has been confirmed. Aggrieved, the appellants are now before the Tribunal. 2. On behalf of the appellant, ld. counsel Shri M. Kannan submitted that the appellant is not contesting the confirma....
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.... Rajasthan Spinning & Weaving Mills - 2009 (238) ELT 3 (SC) have remanded the matter to reconsider the issue of penalty. In the impugned order, the Commissioner (Appeals) has held that appellant did not intimate the clearances made by them in excess of the quantity mentioned in the certificate and therefore has suppressed the facts with intent to evade payment of duty. Thus, the demand has been confirmed invoking the extended period observing that there is suppression of facts on the part of the appellant to evade payment of duty. Therefore, the appellant cannot contend that they are not liable to pay penalty under section 11AC. 5. Heard both sides. 6. The ld. counsel for the appellant has submitted that they are not contesting the demand confirmed and is confining the contest only upon the equal penalty imposed under section 11AC of the Act ibid. The question whether there is suppression of facts with intent to evade payment of duty is dependent upon facts of a case. The Commissioner (Appeals) in first round of litigation vide order dated 30.11.2005 had set aside the penalty imposed under Section 11AC observing that the appellant has paid the duty before issuance of show cause n....
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....excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason 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, by such person or his agent, the provisions of this sub-section shall have effect, [as if] for the words ["one year"], the words "five years" were substituted : Explanation. - Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of [one year] or five years, as the case may be. [(1A) When any duty of excise has not been levied or paid or has been short-levied or short paid or erroneously refunded, by reason of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interes....
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....e Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. - Nothing contained in this sub-section shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason 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. Explanation 2. - For the removal of doubts, it is hereby declared that the interest under section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may....
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....ceives the assent of the President; (1) 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.]" 10. The demand is raised invoking the extended period. The appellant is not contesting the duty demand confirmed. The Hon'ble Supreme Court in Rajasthan Spinning & Weaving Mills (supra) observed that the decision in Dharmendra Textile Processors - 2008 (231) ELT (SC) must be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable, there is no discretion in quantifying the amount and penalty imposed has to be equal to the duty determined. Although the quantum of penalty is prescribed in Section 11AC, the adjudication cannot be considered as a forgone conclusion as the Section contains ingredients like fraud, willful suppression of facts, misrepresentation to be established by Revenue. 11. In the present case, though the duty demand is confirmed for the extended period, since the appell....
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....f duty the penalty clause would automatically get attracted and the authority had no discretion in the matter. One of us (Aftab Alam, J.) was a party to the decision in Dharamendra Textile and we see no reason to understand or read that decision in that manner. In Dharamendra Textile the court framed the issues before it, in paragraph 2 of the decision, as follows: "2. A Division Bench of this Court has referred the controversy involved in these appeals to a larger Bench doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai & Anr. [2007 (8) SCALE 304]. The question which arises for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the "Act') inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter....
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....e as follows : "5. Mr. Chandrashekharan, Additional Solicitor General submitted that in Rules 96ZQ and 96ZO there is no reference to any mens rea as in section 11AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statues mens rea is specifically provided for, so is the limit or imposition of penalty, that is the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no variable and, therefore, no discretion. It is pointed out that prior to insertion of Section 11AC, Rule 173....