TaxTMI 
TaxTMI 
TaxTMI 
2009 (4) TMI 72
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....he controversy raised may first be noticed. The dealer- respondent M/s J.R. Fabrics (P) ltd. is engaged in the manufacture of unprocessed woven fabrics, chenille fabrics and pile fabrics falling under Chapter 54, 55 and 58 of the Central Excise Tariff Act,1985.The dealer- respondent was registered with the central excise department and was availing CENVAT credit facility. It is conceded position that dealer- respondent was clearing its fabrics without payment of duty which was detected when the officers of central excise visited their factory on 13.2.2003. The non payment was found on Chenille fabrics in respect of the period from 28.7.2001 to 28.2.2002 which was prior to the date of registration in March, 2002. The dealer- respondent conceded their default and deposited the amount of duty alongwith interesting amount to Rs. 5,10,995/- levied on the chenille fabrics valued at Rs. 31,93,719/-. The aforesaid amount was paid even before the issuance of show cause notice on 15.2.2003 and 18.2.2003.The dealerrespondent also deposited a sum of Rs. 1,11,373/- on 27.10.2003 before issuing of show cause notice. The dealer- respondent admitted their liability vide their reply dated 13.....
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....ourt in the case of Malbro Appliances Pvt. Ltd. (supra) held that the assessee paid duty before issue of show cause notice; the Tribunal rightly worked out penalty amount to close to 25% of the duty determined. Respectfully following the decision of the Hon'ble High Court, penalty is reduced to Rs. 1,27,000/- i.e. 25% of the duty amount as the respondent deposited duty before issue of show cause notice. The appeal is disposed of in the above terms." Mr. Sanjeev Kaushik, learned counsel for the revenue has vehemently argued that provisions of Section 11 AC of the Act has now been interpreted by Hon'ble the Supreme Court in the case of Union of India v. Dharmendra Textile Processors 2008(231 )ELT 3(SC). According to the learned counsel a plain reading of 2nd proviso to Section 11 AC of the Act would make it clear that equal amount of duty found to be paid to the revenue is to be realised as penalty and therefore the amount of 25% imposed by the Tribunal as penalty is liable to be set aside. Mr. Jagmohan Bansal, learned counsel for the dealerrespondent has, however, submitted that the Tribunal has taken the correct view and the judgement of Hon'ble the Supreme Court in Dharmendra Te....
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....rcent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso: Provided also 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, as reduced or increased, as the case may be shall be taken into account: Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeal), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation: - For the removal of doubts, it is hereby declared that CEA (1) the provisions of this section shall also apply to cases in which the ord....
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....The alteration has been ordered by the Tribunal in the order of the Commissioner ( Appeals) by reducing the amount of penalty to 25% of the total amount of duty of excise assessed by the Assessing Authority. Therefore, we are of the view that the appeal filed by the Revenue is liable to be rejected. It is appropriate to notice that the period in question is 28.7.2001 to 28.2.2002 and there is no dispute that the proviso added by Act No. X of 2000 is made applicable w.e.f. 12.5.2000 would apply which provides that an amount equal to 25% of the amount of duty of excise would be liable to be paid as penalty if the amount of duty of excise is paid within thirty days from the date of communication of the order by the Central Excise Office When we examine the facts of the present case in the light of the aforesaid provision, it becomes evident that the total amount of duty amounting to Rs. 6,300/- was paid on 15.2.2003 and amount of Rs. 5,04,695/- was paid on 18.2.2003. Accordingly a total amount of excise duty of Rs. 5,10,995/- stood paid by 18.2.2003 whereas adjudicatory order in original was issued on 30.4.2004. It is further appropriate to mention that the dealer- respondent ....
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....o Section 11 AC of the Act and therefore the assessee cannot be faulted to challenge the order passed by the Assistant Commissioner which fault was also repeated by the Commissioner (Appeals). The situation is the same in the present case. We, therefore, respectfully agreeing with the view taken by the Division Bench in K.P. Pouches (P) Ltd.'s case (supra) hold that the conclusion reached by the Tribunal that the dealer- respondent was liable to pay penalty to the extent of 25% of the amount of duty of excise determined by the officer concerned. The argument of the Revenue that the judgement in Dharmendra Textile Processor's case (supra) would apply and penalty equal to the amount of duty of excise assessed by the Assessing Authority is to be paid. We are afraid that such an argument would not be available because judgement in Dharmendra Textile Processor's case (supra) dealt with Section 11 AC of the Act and has concluded the mandatory nature of the penalty contemplated by the proviso . In para 26, reference has been made to the Union Budget of 1996-97, when Section 11 AC of the Act was introduced. It was then clarified that there was no scope for any discretion and the levy of p....