TaxTMI 
TaxTMI 
TaxTMI 
2019 (9) TMI 1528
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....adjudication order. However, he chose to impose a penalty of Rs. 5,42,752/- under section 11AC of the Central Excise Act, 1944. The appellants were in appeal before the lower Appellate Authority. The learned Commissioner(Appeals) disposed the appeal ex parte along with dozen other appeals without going into the facts and merits of each case. The arbitrary order passed by the learned Commissioner(Appeals) is as under:- "GOVERNMENT OF INDIA OFFICE OF THE COMMISSIONER OF CENTRAL EXCISE (APPEALS) KOLKATA-IV BAMBOO VILLA (4TH FLOOR) 169, A.J.C. BOSE, ROAD, KOLKATA-700014. F. NO. (1) V (Ch. 72) XAP-200/BOL/07 (2) V(Ch.7202)XAP-201/Bol/07 (3) V(Ch.72)XAP-202/BOL/07 (4) V(Ch.72)XAP-97/Bol/08 (5) V(Ch.3923)XAP-215/Bol/07 (6) V(Ch.72....
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....ilip N. Shroff case [2007 (219) E.L.T. 15 (S.C.)] - penalty under Section 271(1) (C) ibid is a civil liability, enacted to provide remedy for revenue loss wilful concealment not an essential ingredient for attracting civil liability as is the case of prosecution under Section 276C ibid Union Budget of 1996- 97 making position clear that no scope for discretion under Section 11AC ibid and the levy of penalty is a mandatory penalty - Notes on Clauses also giving similar indication- No. inbuilt discretion under Rules 96ZO and 96ZQ of erstwhile Central Excise Rules,1944". Since the substantial question of law has been answered in the decision of the Hon'ble Apex Court, nothing remains to be decided by this Appellate forum. The appeals are dis....
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.... extent to which the penalty may be reduced. 18. One cannot fail to notice that both the proviso to sub-section 1 of Section 11A and Section 11AC use the same expressions : "....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,...". In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tena....
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....as 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 rea....
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....Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (supra) has analysed the legal position in the correct perspectives. The reference is answered.........". 21. From the above, we fail to see how the decision in Dharamendra Textile can be said to hold that Se....
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....een 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 173Q was in vogue in which no mens rea was provided for. It only stated "which he knows or has reason to believe". The said clause referred to wilful action. According to learned counsel what was inferentially provided in some respects in Rule 173Q, now stands explicitly provided in Section 11AC. Where the outer limit of penalty is fixed and the statute provides that it should not exceed a particular limit, that itself indicates scope for discretion but that is not the case here." 23. The decision in Dharamendra Textile must, therefore, be understood to mean that though the applica....