TaxTMI 
TaxTMI 
2007 (8) TMI 310
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....educing the penalty imposed upon the respondent No.1-assessee under Section 11AC of the Act of 1944 to an amount of Rs. 50,000/- and has set aside the order of imposition of penalty on the General Manager of the respondent -assessee. 2. This appeal was admitted on 8-8-2006 while formulating the following substantial question of law:- "Whether in the facts and circumstances of the case, Section 11AC is applicable to the facts of the present case and leaves any discretion with the authorities under the Act to reduce the penalty at less than equal to the duty determined where it is found that penalty is otherwise imposable under Section 11AC?" 3. Brief and relevant facts leading to the aforesaid order dated 28-3-2005 and this appeal could b....
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.... on 11-1-2003 under Section 14 of the Act of 1944 admitted that all the work relating to Central Excise was carried under his supervision; and further admitted that they were using the common inputs in the manufacture of dutiable as well as exempted final products and have not reversed the Cenvat credit from October 2001 to December 2002 in respect of dyes and chemicals, and from January 2002 to December 2002 in respect of grey yam used in the manufacture of exempted goods. On being asked by the officers, the Manager reversed the entry. 5. The appellant submits that the respondent-assessee knowingly and intentionally, and by suppressing the facts, had not paid an amount of Rs. 3,06,574/- attributable to inputs used in the manufacture of ex....
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....s. 25,000/- on the General Manager of the assessee under Rule 26 of the Central Excise Rules, 2002. 8. The assessee and the said General Manager filed appeals before the Commissioner (Appeals-II), Customs & Central Excise, Jaipur. The appellate authority by his order dated 11-6-2004 upheld the original order to the extent it confirmed and appropriated the demand of Rs. 3,06,574/- and imposed equal amount of penalty. However, the appellate authority reduced the penalty imposed on the General Manager from Rs. 25,000/- to Rs. 15,000/-. 9. The aforesaid order dated 11-6-2004 was taken in appeal by the respondent-assessee and the General Manager before the Tribunal particularly in relation to the imposition of penalty; and submitted that since....
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.... particularly on the question as to whether there was any discretion with the authorities under the Act to reduce the penalty at less than equal the duty determined, when it is found that the penalty is otherwise imposable under Section 11AC? 12. During the course of consideration of this appeal, learned counsel appearing for the respondent No.1 filed cross-objections with prayer for condonation of delay in relation to the findings recorded against him in the order impugned. After expressing our reservations on the competence of such cross-objections, we permitted such cross-objections to be placed on board along with the present appeal and the office placed the same with the note that the said papers could not be inwarded for want of avai....
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....rily by the appellant, and the amount of reversal was accepted by the adjudicating officer shows the bona fide of the appellant justifying non-levy of any penalty under Section 11AC of the Act of 1994. 14. An application under Section 5 of Limitation Act has also been filed seeking condonation of delay in filing the cross-objections with the submissions that the assessee has recently come to know about the aforesaid judgment dated 2-3-2007 in T.P.L. Industries Limited wherein it has been held that no action under Section 11AC of the Act of the 1944, could be initiated or taken where the duty has been deposited before issuance of the show cause notice. 15. Having heard learned counsel for the parties and having examined the matter in its t....
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....ty can be initiated or taken. The reason is obvious. As on the date show cause notice is issued, there is no short levy of Duty for which such notices can be issued." 17. The fact that the duty was deposited before issuance of show cause notice is not disputed by the appellant either. In the circumstances of the case that the Tribunal had substantially granted the relief, albeit of reduction of the amount of penalty, obviously, the respondent-assessee choose not to challenge the order passed by the Tribunal. 18. While taking an overall view of the matter, we cannot ignore the decision of a co-ordinate Division Bench in T.P.L. Industries' case (supra) that such penalty is not leviable at all. In view of the aforesaid decision in T.P.L. Ind....