2008 (3) TMI 343

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....the Central Excise Act, 1944? (ii) Whether in appeal filed by the Revenue against the order of the Commissioner of Central Excise (Appeals) setting aside the penalty levied against the assessee, the Tribunal was justified in not entertaining the plea of the assessee that in case appeal is allowed, the quantum of penalty may be reduced, on the ground that no cross-examination has been filed? (iii) Whether mens rea in any form is part of consideration before penalty under Section 11AC can be imposed?" 2. We have heard learned Counsel for the parties. 3. The skeleton facts are, that on 5-10-2001, during course of transit check, vehicle No. RJ 1G-4585 was intercepted, and on checking it was found that it was carrying 20 bags (585 Kg....

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..... M/s. Perfect Thread Mills Ltd., decided on 10-8-2007 [2009 (234) E.L.T. 49 (Raj.)], and contended, that in view of the provisions of Section 11AC(2b), since the assessee had deposited the requisite duty, even before issuance of show cause notice, no penalty under Section 11AC could be imposed, and therefore, the impugned order of the learned Tribunal is liable to be set aside. 5. On the other hand, learned Counsel for the respondent relied upon two judgments of Punjab and Haryana High Court; one being in Central Excise Appeal No. 13 of 2005, decided on 25-7-2006, reported in 2006 (202) E.L.T. 398 (P&H) = 2006 (4) S.T.R. 177 (P&H), Commissioner of Central Excise v. Machino Montell (I) Ltd., and the other being in Commissioner of Central....

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....f Section 11AC incorporates liability to pay penalty in the situation mentioned therein, and once a case is covered by the situation mentioned in the Section, mere deposit, prior to issuance of show cause notice under Section 11A of the Act, will not necessarily negate the situation mentioned in the said section. In that case the matter related to the year 1999, and show cause notice was issued on 19-6-2001, while the amount was deposited under protest on 23-5-2001. Then, in para 8 the submission of the assessee has been noticed, on the anvil of Section 11A(2B) and Section 11A(2C), interpreted the prohibition against imposition of penalty in the event of deposit having been made prior to issuance of show cause notice, and the submission of ....

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....has been paid before issuance of show cause notice, would not result into non-application of Section 11AC, and the penalty could still be imposed. From this judgment, it is not clear, as to what was the relevant date, inasmuch as in the earlier part we have found, that the order confirming the duty under Section 11A of the Act was passed; by the adjudicating authority on 13-8-2005. Then, the relevant thing to be noticed is, as observed above, the Machino Montell's case was a case on facts, depending upon facts of its own, relating to falling within a particular time zone, viz. as to whether it falls within a period before the date on which the Finance Bill received assent of the President, or within the time zone subsequent thereto. Since i....