2011 (8) TMI 164 - HC - Central Excise

Interest and penalty - in the case of Commissioner of Central Excise, Chandigarh vs. Ruchira Papers Ltd. (2009 -TMI - 34967 - HIMACHAL PRADESH HIGH COURT) - it will be open to the assessee to urge that such question does require consideration in which event, the learned Tribunal shall proceed to determine as to whether the points raised by the assesee require determination on the factual/legal matrix and whether the precedent cited before us by the respondent is attracted/applicable to the facts of the case - Appeal is disposed of

Summary

Issues:
1. Imposition of interest and penalty when excise duty is deposited before Show Cause Notice.
2. Determination of penalty based on fraud, collusion, misrepresentation, or contravention of Excise Act provisions.

Issue 1 - Imposition of Interest and Penalty:
The High Court considered the question of whether interest and penalty can be imposed even if Central Excise duty has been deposited by the assessee before the issuance of the Show Cause Notice. Referring to a previous decision, the Court held that penalty can indeed be imposed even if the excise duty is deposited before the issuance of the notice. The Court emphasized that the imposition of penalty is a question of fact and remanded the case back to the Commissioner for fresh decision on the issue of penalty. The Commissioner was directed to determine whether the non-payment of duty was due to fraud, collusion, willful misrepresentation, suppression of facts, or contravention of Excise Act provisions with the intention to evade payment of duty.

Issue 2 - Determination of Penalty:
The Court examined whether the question of penalty imposition required adjudication based on fraud, collusion, misrepresentation, or contravention of Excise Act provisions. The assessee relied on previous decisions to argue that the question did not need adjudication. However, the Court found that the issue raised in the appeal was covered by a previous decision and remanded the case to the Tribunal for reconsideration in line with the judgment in the previous case. The Court allowed the assessee to argue that the question required consideration, and the Tribunal was instructed to determine whether the points raised necessitated consideration based on the factual and legal context. Ultimately, the appeal was disposed of based on these considerations.