TaxTMI 
TaxTMI 
2019 (2) TMI 1020
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....(Rs Fifteen Lakhs Forty Six Thousand Three Hundred and Twenty only) separately paid by the assessee against interest payable under Section 11AB of the Central Excise Act, 1944. iv. I also impose a penalty of Rs. 54,99,975.00 (Rs. Fifty Four Lakhs Ninety Nine Thousand Nine Hundred and Seventy Five) on the assessee, under Rule 25 of the Central Excise Rules 2002 read with Section 11AC of the Central Excise Act, 1944. v. I confirm the demand of Rs. 1,04,44,742.00 (Rs. One Crore Four Lakhs Forty Four Thousand Seven Hundred and Forty Two) and Cess amounting to Rs. 2,09,000.00 (Rs. Two Lakhs Nine Thousand) for the period April 2004 to March under Section 11A(2) of the Central Excise Act, 1944. vi. I appropriate the amount of Rs. 1,04,44,742.00 (Rs. One Crore Four Lakhs Forty Four Thousand Seven Hundred and Forty Two) and Cess amounting to Rs. 2,09,000.00 (Rs. Two Lakhs Nine Thousand) paid by the assessee, against the amount confirmed in (v) above. vii. I also confirm and appropriate the amount of Rs. 24,53,150.00 (Rs. Twenty Four Lakhs Fifty Three Thousand One Hundred and Fifty only) separately paid by the assessee against interest payable under Section 11AB of the Central Ex....
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....ty Nine) and Cess amounting to Rs. 64,741.00 (Rs. Sixty Four Thousand Seven Hundred and Forty One) for the period April 2005 to November 2005 (clearances) of semi-finished goods from Unit 1 to 2) under Section 11a(2) of the Central Excise Act, 1944. xviii. I appropriate the amount of Rs. 32,37,059.00 (Rs., Thirty Two Lakhs Thirty Seven Thousand and Fifty Nine) and Cess amounting to Rs. 64,741.00 (Rs. Sixty Four Thousand Seven Hundred and Forty One) paid by the assessee, against the amount confirmed in (xvii) above. xix. I also confirm and appropriate the amount of Rs. 1,75,669.00 (Rs. One Lakh Seventy Five Thousand Six Hundred and Sixty Nine only) separately paid by the assessee against interest payable under Section 11AB of the Central Excise Act, 1944. xx. I also impose a penalty of Rs. 33,01,800.00 (Rs. Thirty Three Lakhs One Thousand and Eight Hundred only) on the assessee, under Rule 25 of the Central Excise Rules 2002 read with Section 11AC of the Central Excise Act, 1944. xxi. I confirm the demand of Rs. 9,02,463.00 (Rs. Nine Lakhs Two Thousand Four Hundred and Sixty Three only) for the period April 2003 to March 2004 (clearances of goods from Unit No.2) under Se....
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....d and Thirty Five only) and Cess amounting to Rs. 40,689.00 (Rs. Three Lakhs Thirty Three Thousand Five Hundred and Ninety Two only) paid by the assessee, against the amount confirmed in (xxxiii) above. xxxi. xxxi. I also confirm and appropriate the amount of Rs. 1,57,097.00 (Rs. One Lakh Fifty Seven Thousand and Ninety Seven only) separately paid by the assessee against interest payable under Section 11AB of the Central Excise Act, 1944. xxxii. I also impose a penalty of Rs. 20,75,124.00 (Rs. Twenty Lakhs Seventy Five Thousand One Hundred and Twenty Four only) on the assessee, under Rule 25 of the Central Excise Rules 2002 read with Section 11AC of the Central Excise Act, 1944. xxxiii. I confirm the demand of Rs. 1,59,391.00 (Rs. One Lakh Fifty Nine Thousand Three Hundred and Ninety One only) and Cess amounting to Rs. 1013.00 (Rs. One Thousand and Thirteen only) for the period April 2003 to March 2004; April 2004 to March 2005 and April 2005 to November 2005 (clearances of semi finished goods from Unit No.2 to Unit No.1) under Section 11A(2) of the Central Excise Act, 1944. xxxiv. I appropriate the amount of Rs. 1,59,391.00 (Rs. One Lakh Fifty Nine Thousand Three Hundr....
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....ester film in jumbo rolls received by them. 2.5 Both the units of Appellant had cleared certain goods without accounting them in SAP-ERP system and without payment of duty. 2.6 The details of demand in respect of the units is as follows: Period Duty Demand Reason for Demand From To Unit 1 April 03 March 04 5499975 Demand on Finished Goods cleared without accounting April 04 March 05 10653742 March 03 November 05 10209319 Intermediate Products Cleared to Unit 2 Total 26363036 Unit 2 April 03 March 04 902463 Demand on Finished Goods cleared without accounting April 04 March 05 18298112 April 05 November 05 2075124 April 03 March 06 160404 Intermediate Products cleared to Unit 1 Total 21436103 2.7 Appellants paid the entire amount of duty demanded along with interest. 2.8 The proceedings have been initiated against the appellant by way of issuance of Show Cause Notice dated 26.02.2008 for • confirmation of the demand of duty short paid by invoking proviso to Section 11A(1) of the Central Excise Act, 1944, • demand interes....
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....ses: a. Jhagadia Coper Ltd [2009 (248) ELT 373 (T)] b. Wearwell tyre & Tubes Industries Pvt Ltd [2004 (165) ELT 409 (T)] 3.3 Arguing for the revenue learned Authorized Representative justified the order of adjudicating authority and submitted that in case of short payment of duty on account of various reasons justifying invocation of extended period of limitation as per proviso to Section 11A(1), penalty under Section 11Ac is mandatory. He relied on the decision of Apex Court in case o Prudential Spinners Ltd [2011 (267) ELT 291 (SC)], Delhi High Court in case of Shiva Alloys Pvt Ltd [2018 TIOL 988 HC DEL CX] in his support. 4.1 We have considered the submissions made in appeal and during the course of argument by both the sides- 4.2 There appears to be no dispute that Appellants have not paid the duty demanded at the relevant time and hence short paid the duty to that extent. In case of non/ short payment of duty, Section 11A of the Central Excise Act, 1944 automatically comes into picture and demand is made in terms of that section, to recover the duty so short paid. In case the duty is paid after the relevant date the same gets adjusted by application ....
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....tted that the Tribunal has no jurisdiction to impose lesser penalty than the duty adjudicated to be payable. It is further submitted that mere payment of duty before issuance of show cause notice is also of no consequence. 5. At the bar it was mentioned that the issue is of vital importance in large number of matters. Considering that Shri Sreedharan, Advocate of this Court was appointed as Amicus Curiae to assist this Court. 6. The learned Amicus Curiae considering Section 11A and 11AC has submitted that in order to impose penalty two predicates are to be satisfied, firstly the duty has to be determined under sub-section (2) of Section 11A and secondly, that the duty was not paid with an intent to evade payment. It is only on satisfaction of these to predicates can penalty be imposed under Section 11AC. Referring to the judgment in Rajasthan Spinning & Weaving Mills (supra) it is submitted that the judgment can be said to have been passed sub-silentio in so far as the first requirement is concerned and consequently the judgment of the Supreme Court cannot be held to have concluded the issue on there being a need for determination of duty under Section 11A(2). 7. We have h....
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....t of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined." (3)..........." 9. The controversy requires consideration of Section 11AC also, which reads as under :- "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 or 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 has reduced or increased, as the case may be, shall be taken into account." 10. The Judgment in Dharamendra Textile Processors (supra) came up for ....
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....d, therefore, it is sub silentio. As to what would constitute sub silentio we would gainfully refer from Solmond on Jurisprudence, Twelfth Edition, by P.J. Fitzgerald, M.A., Indian Economy Reprint, 2002, which reads as follows :- "A decision passes sub silentio, in the technical sense that has come to be attached to that phrase, when the particular point of law involved in the decision is not perceived by the court or present to its mind. The court may consciously decide in favour of one party because of point A, which it considers and pronounces upon. It may be shown, however, that logically the court should not have decided in favour of the particular party unless it also decided point B in his favor; but point B was not argued or considered by the court. In such circumstances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio." 12. Can it be said that this issue was sub-silentio and not under consideration in Rajasthan Spinning & Weaving Mills. In our opinion it is not possible to accept the said submission considering the last sentence of para....
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.... violated the provisions of the Central Excise Rules read with Section 11A of the Central Excise Act. In the show cause notice, it was specifically stated that in view of the aforesaid short payment or non-payment, penalty equal to the duty payable should be paid by the assessee as provided under Section 11AC of the Central Excise Act. The extended period of limitation was also invoked by the department. By referring to proviso to Section 11A of Central Excise Act, a reply to the show cause notice was filed. The Commissioner considered the allegation against the respondent as also the reply submitted by him and on appreciation thereof, came to a finding that the charge of evasion of duty through mis-statement, suppression and fraud was proved justifying the application of extended period of five years as provided in Section 11A of the Central Excise Act, 1944. It was also held that in equal quantity of excisable goods were removed by the assessee without payment of duty. Finally, by exercising the powers under Section 11AC, penalty was also imposed to the extent of equal amount of the duty which is 100% penalty. 3. Being aggrieved by the aforesaid order passed by the Commissione....
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....y must be imposed equal to the duty determined under sub-section (2) of Section 11A. On consideration of the factual position, we also hold that, in the present case, the Tribunal was not justified in reducing the quantum of penalty as penalty under the provision of the Act must be imposed equal to the duty determined under sub-section (2) of Section 11A. We also make it clear that in the present case applicability of any other provision except for substantive provision of sub-section (2) of Section 11A and substantive provision of Section 11AC was pleaded. Nor any effort was made to substantiate or prove a case of applicability of any of the provisos therein and not even such a case was pleaded." 4.6 In view of the above decisions of Apex Court and jurisdictional High Court we do not find merits in the submissions of the appellants. 4.7 Appellant have in their appeal at Sl No 9 and submissions in para 5.3 stated that they have paid 25% of the penalty amount. In terms of Section 11AC as it existed during the relevant period read as follows: "Section 11AC as amended by the Finance Act, 2000 with effect from 12th May, 2000. Section 11AC - Penalty for short-levy or non-lev....