2009 (4) TMI 196 - HC - Central Excise

Appellate Tribunal s order - Penalty - scope of SCN - Held that - No penalty could have been imposed without specifying in the show cause notice the relevant provision under which the penalty was sought to be imposed. The show cause notice does not indicate the relevant clause to Rule 173Q of the Central Excise Rules, 1944 based on which penalty was sought to be imposed. In the light of that the order of the Tribunal to that extent is upheld.

Summary

Issues:
1. Payment of excise duty under the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944.
2. Imposition of penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:

Issue 1: Payment of excise duty under Section 11A and interest under Section 11AB
The High Court observed that both the Assessing Officer (A.O.) and the appellate authority ruled in favor of the Revenue concerning the payment of excise duty under the proviso to sub-section (1) of Section 11A of the Central Excise Act, 1944. However, the Court noted that the Tribunal did not address the issues properly and failed to fix the point for determination before making a decision. Therefore, the Court remanded the issue of payment of duty under Section 11A and interest under Section 11AB back to the Tribunal for a fresh consideration.

Issue 2: Imposition of penalty under Section 11AC
Regarding the imposition of penalty under Section 11AC, the Court considered the argument presented by the respondents' Counsel, citing a Supreme Court judgment in a similar case. The Court agreed with the respondents that no penalty could have been imposed without specifying the relevant provision in the show cause notice. The show cause notice did not indicate the relevant clause to Rule 173Q of the Central Excise Rules, 1944, based on which the penalty was sought to be imposed. Consequently, the Court upheld the order of the Tribunal on this point. The Court also noted that the issue of penalty was covered by the Supreme Court judgment referenced by the respondents, and hence, no purpose would be served by remanding the matter back on that point.

In conclusion, the High Court partly allowed the appeal and disposed of the case, upholding the Tribunal's decision on the penalty issue while remanding the issues of payment of duty under Section 11A and interest under Section 11AB back to the Tribunal for fresh consideration.