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2016 (11) TMI 9 - AT - Central ExciseBenefit of reduced penalty u/s 11AC of the Act - payment of penalty within stipulated time - adjustment of excess tax paid towards liability of reduced penalty - The matter has got a long history having gone up and down number of times. It went to Hon ble High Court of Karnataka three times. It came to this Tribunal also earlier three times. Now it is before us fourth time - Held that - Since the matter involves verification and cross-checking at the level of respective field formation with reference to the detailed claims and the submissions of the appellants, it is remanded to the Commissioner of Central Excise, Bangalore-II, who shall consider the matter afresh keeping in mind the observations made in the judgment dated 6.12.2013 by the Hon ble High Court of Karnataka - The Commissioner shall decide the issue within three months from the date of receipt of this order after giving opportunity of personal hearing and that of production of necessary documents to the assessee-appellant within one month of receipt of this order - appeal allowed by way of remand.
Issues Involved:
1. Demand of duty and imposition of penalty. 2. Entitlement to the benefit of the proviso to Section 11AC of the Central Excise Act. 3. Adjustment of excess tax paid towards reduced penalty. Detailed Analysis: Demand of Duty and Imposition of Penalty: The appellants, M/s. Tilrode Chem Pvt. Ltd. and its Managing Director, appealed against the Order-in-Original dated 30.1.2003, which confirmed a duty demand of ?46,00,500/- and imposed a penalty of ?56,00,500/- (inclusive of a penalty of ?10 lakh under Rule 173Q). This order was a result of a show-cause notice issued on 2.8.2002, proposing a demand of ?81,60,716/-. The Tribunal initially remanded the matter for reconsideration, but the Commissioner reconfirmed the demands. Upon further appeals, the Tribunal confirmed a duty of ?20,19,980/- and a penalty of ?2,51,200/-, and remanded part of the matter for re-computation of duty. Subsequent orders and appeals led to various adjustments and re-evaluations, ultimately leading to the High Court's involvement. Entitlement to the Benefit of the Proviso to Section 11AC of the Central Excise Act: The High Court of Karnataka, in its judgment dated 6.12.2013, addressed whether the assessee is entitled to the benefit of the proviso to Section 11AC of the Act if the payment of penalty is made within the stipulated time. The High Court ruled in favor of the assessee, stating that if the duty is paid within the prescribed time, the statute extends the benefit of reduced penalty. The Tribunal was directed to reconsider the issue of penalty in light of this. Adjustment of Excess Tax Paid Towards Reduced Penalty: The High Court also considered whether the assessee is entitled to adjust excess tax paid towards the liability of reduced penalty. It was observed that if the assessee has made excess payments, these should be adjusted towards the amount due. If, after such adjustment, no duty or interest is payable, the imposition of penalty would not arise. The Tribunal was instructed to verify these claims and make appropriate adjustments. Conclusion: The Tribunal, following the High Court's directives, remanded the matter to the Commissioner of Central Excise, Bangalore-II, for fresh consideration. The Commissioner is to verify the detailed claims and submissions of the appellants, keeping in mind the High Court's observations. The issue is to be decided within three months, with an opportunity for the appellants to present necessary documents and a personal hearing. (Order pronounced in open court on 06/10/2016.)
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