2010 (2) TMI 1039 - AT - Central Excise

Summary

Issues involved: Penalty imposed under Section 11AC on M/s. K.P. Fragrances and penalty imposed on Shri Amit Sharma.

Penalty on M/s. K.P. Fragrances:
The appellant argued that there was no evidence of malafide intention for the short payment of duty, hence penalty should not be imposed. Reference was made to Section 11AC of Central Excise Act, 1944 and a judgment of the Hon'ble Delhi High Court for concessional penalty even in cases of penalty imposition.

Penalty on Shri Amit Sharma:
The submission was that since there was no discrepancy found during the investigation and the appellant was absent during the visit, no penalty should be imposed. The Revenue relied on a statement from Shri Amit Sharma, but the appellant argued that without any discrepancy, penalty should not be levied.

During the hearing, the appellant cited a judgment from the Hon'ble High Court of Punjab & Haryana to support the argument that a penalty of 25% can be paid beyond 30 days for concession under Section 11AC.

The Revenue contended that no concession should be granted when penalty is leviable under Section 11AC, and cited previous court decisions to support their position.

The Tribunal considered the arguments from both sides and examined the records. It referred to the judgment of the Hon'ble High Court of Delhi regarding the availability of an option for the Assessee to avail concession in penalty, emphasizing that denial of such option would result in a denial of justice.

The Tribunal noted that the order of the Single Member Bench of Chennai did not consider the judgment of the Hon'ble High Court of Delhi, and therefore, the Revenue's reliance on other judgments was deemed unhelpful. Following the direction of the Hon'ble High Court of Delhi, the Tribunal held that the appellant should be given the option to discharge the penalty under Section 11AC.

Regarding the penalty on Shri Amit Sharma, the Tribunal found that the appellant failed to provide sufficient explanation for the discrepancies found during the investigation. The appellant's absence during the investigation did not justify granting any concession in penalty, leading to the dismissal of the appeal.

The Tribunal also discussed a judgment from the Hon'ble High Court of Punjab & Haryana, which supported the view that penalty payment beyond 30 days could still avail a concession. The Hon'ble High Court dismissed the appeal, noting the lack of contrary views from jurisdictional courts or the Apex Court.

In conclusion, both appeals were disposed of based on the above considerations.