2011 (11) TMI 340 - AT - Central Excise

Plea for waiver of penalty deposited duty & interest before passing of the Adjudication order Held that - Assessee is not in appeal on the finding that extended period of time is invokable. So we do not propose to go into this issue hence, penalty u/s 11AC is to be imposed. Since assessee have fully cooperated and paid duty and interest hence an option is given to pay 25% of the duty demanded as penalty within 30 days of receipt of this order. - Decided in favor of Revenue

Summary

Issues:
Short levy of excise duty invoking extended period of limitation under Section 11A of the Central Excise Act, imposition of penalty under Section 11AC, interpretation of law leading to short levy, waiver of penalty by Commissioner (Appeals), cooperation of Respondents, opportunity to pay penalty for closure of the case.

Analysis:
The case involved a demand for excise duty amounting to Rs.19,88,887/- from the Respondents due to short levy, with interest under Section 11AB, and a penalty under Section 11AC imposed by the Adjudicating Authority. The Respondents had paid both the duty demand and interest before the Adjudication order, which were appropriated against the demands made. The Commissioner (Appeals) upheld the duty demand and interest but waived the penalty under Section 11AC. The Revenue appealed to the Tribunal seeking the imposition of the penalty.

The Respondent's counsel argued that the short levy was not intentional but due to a bona fide interpretation of the law, with a pending dispute in the High Court. The Respondents deposited the amount promptly after the High Court decision. The Tribunal noted that the Respondent did not appeal the finding on the extended period of limitation, so the focus was on the imposition of the penalty under Section 11AC. The Tribunal decided to impose the penalty but acknowledged the Respondents' cooperation in paying the duty and interest.

The Tribunal observed that the adjudicating authority did not provide an opportunity for the Respondents to pay 25% of the duty demanded as a penalty for case closure. Following a decision of the Delhi High Court, the Tribunal granted the Respondents the option to pay 25% of the duty demanded as a penalty within 30 days of receiving the order. Consequently, the appeal by the Revenue was allowed, and the penalty under Section 11AC was imposed, with the additional opportunity for the Respondents to pay the penalty for case closure.