TaxTMI 
TaxTMI 
2026 (6) TMI 1418
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....ow committed substantial error of law in setting aside the order of imposing penalty while remanding the matter to original adjudicating authority." 3. This Appeal was admitted along with Tax Appeal No.462 of 2011 and was ordered to be heard with Tax Appeal No.1662 of 2008. 4. Learned advocates appearing for the parties submitted that the Tax Appeal No.1662 of 2008 and Tax Appeal No.462 of 2011 are disposed of in view of the Low Tax Effect Circular. 5. Brief facts of this case are as under : 5.1. This Appeal is filed under Section 35-G of the Central Excise Act, 1944 (for short 'the Act') by the Revenue being aggrieved by the order passed by the Customs Excise and Service Tax Appellate Tribunal, West Zonal Bench, Ahmedabad (for short 'the CESTAT') whereby, by the order dated 7th January, 2008, the CESTAT disposed of the Appeals filed by the respondent along with other co-noticees by remanding the matter back to the Adjudicating Authority. The issue raised before the CESTAT was regarding clearances effected by the respondent which is 100% EOU in terms of Notification No. 20/98-CE dated 18th July, 1998 to other appellants, who are the purchasers of the goods manufactured ....
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....read with Section 11AC of the Act or not, is a question, which ought to have been kept open by the CESTAT. 7.1. On the other hand, learned advocate Mr. Hardik Modh appearing for the respondent-assessee submitted that Rule 25 of the Rules provides for confiscation and penalty and as per Clause (d) of the said Rule, such confiscation and penalty would be leviable, if the assessee contravenes any of the provisions of the Rules or the Notifications issued under these Rules with intent to evade the payment of duty. 7.2. It was submitted that the question before the CESTAT was with regard to the applicability of the Notification No. 20/98-CE to the respondent-assessee or not and there was no intention attributed to the respondent-assessee to evade the payment of duty. It was submitted that it was a pure question of interpretation, which was settled by the Larger Bench in favour of the respondent-assessee and therefore, the provisions of Rule 25 of the Rules read with Section 11AC of the Act would not be applicable in the facts of the case and therefore, the CESTAT has rightly held that no penalty could have been imposed upon the respondent-assessee and other appellants and the matt....
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....he order of the Central Excise Officer who has determined such duty, the amount of penalty liable to be paid by such person shall be twenty-five per cent. of the penalty imposed, subject to the condition that such reduced penalty is also paid within the period so specified; (c) where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud or 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 (10) of section 11A shall also be liable to pay a penalty equal to the duty so determined : Provided that in respect of the cases where the details relating to such transactions are recorded in the specified record for the period beginning with the 8th April, 2011 up to the date on which the Finance Bill, 2015 receives the assent of the President (both days inclusive), the penalty shall be fifty per cent. of the duty so determined; (d) where any duty demanded in a show cause notice and the inte....
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....f these rules or the notifications issued under these rules; or (b) does not account for any excisable goods produced or manufactured or stored by him; or (c) engages in the manufacture, production or storage of any excisable goods without having applied for the registration certificate required under section 6 of the Act; or (d) contravenes any of the provisions of these rules or the notifications issued under these rules with intent to evade payment of duty,- then, all such goods shall be liable to confiscation and the producer or manufacturer or registered person of the warehouse for an importer who issues an invoice on which CENVAT credit can be taken,] or a registered dealer, as the case may be, shall be liable to a penalty not exceeding the duty on the excisable goods in respect of which any contravention of the nature referred to in clause (a) or clause (b) or clause (c) or clause (d) has been committed, or (five thousand rupees], whichever is greater. (2) An order under sub-rule (1) shall be issued by the Central Excise Officer, following the principles of natural justice." 9. It would also be germane to refer to the Notificat....
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....al Excise Act, 1944 (1 of 1994) ***************************** Note: 1. For the word "Schedule", the words "First Schedule" has been substituted vide Notification No.11/2000 dated 1/3/2000 2. Against S. Nos, 1 and 2, for the entry in column (4) occurring against each of them, the entry "Fifty percent, of the duty specified in the First Schedule to the said Central Excise Tariff Act" has been substituted vide Notification No.11/2000 dated 1/3/2000 3. Has been inserted vide Notification No.48/2000, Dated 22-09-2000" 10. On perusal of the above Notification and the Rule 25 read with Section 11AC of the Act, it appears that the question before the Tribunal was with regard to the applicability of the Notification to the availment of the exemption, as provided in the Notification, by the respondent-assessee for clearance of the goods. The respondent-assessee is 100% EOU and has sold the goods to the other appellants, who are in the DTA, which would amount to at par with the physical export and therefore, the benefit of Notification No. 20/98-CE was claimed by the respondent-asseessee, which has been upheld by the Larger Bench in case of the ....
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....ssion was accepted by the Tribunal and it was held in para 8 of the decision [2002 (139) E.L.T. E.L.T. that the clearance effected in DA against foreign exchange is entitled to the benefit of Notification No. 2/95-CE which is available to DTA clearances effected by the EOU in terms of para 9.9(a), (b), (c), (d) and para 9.20 of the Policy. However, the Tribunal held that only 50% of such clearances effected against foreign exchange would be entitled to the benefit of Notification No. 2/95-CE. Against the Tribunal's decision, both the assessee as well as the department filed appeal to Supreme Court. The Supreme Court allowed the appeal of the assessee and dismissed the appeal of the department, as seen from 2007 (211) E.L.T. 353(S.C.). In para 7, the Apex Court held that these clearances would be entitled to exemption under Notification No. 2/95-CE. The Supreme Court also held that there is no warrant to limit the exemption to 50%. The Supreme Court held that entire value of clearances effected in TA against free foreign exchange would be entitled to the benefit of exemption under Notification No. 2/95-C.E." 11. After taking into consideration the above decision of the Larger....