TaxTMI 
TaxTMI 
2026 (6) TMI 1470
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....ound that the Tribunal had already set aside the penalties imposed upon other co-appellants before it?" 3. The respondent-assessee, a 100% EOU, was engaged in the business of manufacturing Grey Fabrics. A preventive check was conducted by the Superintendent (Prevention) Central Excise and Customs, Surat-I, on 24.05.2000 at the premises of the respondent-assessee as well as at M/s. Bhagatram Parmanand, which is a proprietary concern. 4. During the course of inspection, it was found that the respondent-assessee sold the fabrics to various persons without filing the proper documents and without payment of duty in the domestic tariff area resulting into contravention of the provisions of the Central Excise Act, 1944 ['the Act' for short] read with the relevant provisions of the Customs Act, 1962. The Commissioner of Central Excise and Customs confirmed the demand of customs duty of Rs. 7,01,795/- and the benefit of exemption contained in Notification No. 2/95 was not granted and the exemption was denied to the clearance made in the Domestic Tariff Area by each of the assessee and the duty was levied accordingly. 5. However, the adjudicating authority, while passing the order o....
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.... 2008 (231) E.L.T. 3 (S.C.) to submit that once the duty is levied, the imposition of penalty under section 11AC of the Act becomes mandatory. 11.2 Learned advocate Mr. Gupta referred to the following paragraphs of the said decision in support of his submissions: "20. A casus omissus ought not to be created by interpretation, save in some case of strong necessity. Where, however, a casus omissus does really occur, either through the inadvertence of the legislature, or on the principle quod enim semel aut bis existit praetereunt legislatores, the rule is that the particular case, thus left unprovided for, must be disposed of according to the law as it existed before such statute-casus omissus et oblivioni datus dispositioni communis juris relinquitur; "a casus omissus", observed Buller, J. in Jones v. Smart 1785 (1) TR 44:99 ER 963 (ER p. 967) "can in no case be supplied by a court of law, for that would be to make laws". The principles were examined in detail in Maulavi Hussein Haji Abraham Umarji v. State of Gujarat (2004 (6) SCC 672). 21. The golden rule for construing all written instruments has been thus stated: "The grammatical and ordinary sense ....
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....decision, it was submitted that the Hon'ble Supreme Court in case of Dharmendra Textile Processors is further followed in the following decisions: * Commissioner of Central Excise, Haldia vs Excide Industries Ltd reported in 2009 (234) E.L.T. 388 (S.C.); * Commissioner of Central Excise, Mumbai vs. Sunil Silk Mills reported in 2011 (267) E.L.T. 438 (S.C); * Commissioner of Central Excise, Chandigarh vs. Stesalit Ltd reported in 2017 (347) E.L.T. 385 (S.C.) 11.3 It was, therefore, submitted that the Tribunal ought to have held that once the duty is leviable upon the respondent-assessee, it would attract the penalty leviable under section 11AC of the Act as a mandatory penalty. 12. The decision of the Hon'ble Supreme Court in case of Dharmendra Textile Processors (supra) has been further explained in case of Union of India vs. Rajasthan Spinning & Weaving Mills reported in 2009 (238) E.L.T 3 (S.C) wherein, the Hon'ble Supreme Court, after considering the provisions of section 11AC of the Act, has held as under: "17. The main body of sub-section lays down the conditions and circumstances that would attract penalty and the various provisos enum....
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....d 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 vs. 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 read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. The assessee on the other hand referred to Section 271(1)(c) of the Inc....
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....n section 11AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statues mens rea is specifically provided for, so is the limit or imposition of penalty, that is the maximum fixed or the quantum has to be between 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 willful acti....