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2012 (10) TMI 78 - AT - CustomsReduction of penalty equal to 25% clandestine removal - appellant is not disputing the fact that there is clandestine removal contention of assessee is that benefit of provisions of sub Section 1A and two provisos of sub-section (2) of Section 11A of the Central Excise Act, was not given to the appellant at the time of issuance of show cause notice Held that - Once the option is made known to the person by explicitly stating in the notice and the person still does not take advantage of the scheme, it would be entirely to his own peril. But if the option is explicitly not stated in the notice with proper quantification of particular amount of duty and interest, the failure on the part of person to pay duty, interest and penalty amount equivalent to 25% of duty, within 30 days of the notice, under Section 11A of the Central Excise Act, 1944/Section 28 of Customs Act, 1962, it cannot be held against the person and he shall get option of the said beneficiary scheme even on payment within 30 days of subsequent communication, with proper quantification and particular amount of duty and interest - benefit of provisions of sub-Section (1A) and two provisos of sub-section (2) of Section 11A of the Central Excise Act, 1944 to extended to the assessee in favor of assessee
Issues Involved:
1. Clandestine removal of goods by M/s. Sonam Clocks Pvt. Limited (SCPL) without payment of duty. 2. Application of provisions of sub-section (1A) and two provisos of sub-section (2) of Section 11A of the Central Excise Act, 1944. 3. Duty liability and penalties imposed on SCPL and associated individuals. Detailed Analysis: Issue 1: Clandestine Removal of Goods The appellants, M/s. Sonam Clocks Pvt. Limited (SCPL), were found to have engaged in the clandestine removal of Quartz Analog Wall Clocks without payment of duty. During a search operation on 27/28-9-2006, various incriminating documents were recovered, indicating unaccounted clearances. The Chairman and Managing Director of SCPL admitted to these clearances. A show cause notice dated 23-6-2008 was issued, demanding duty on the clandestinely removed goods along with interest and proposing penalties on all appellants. The adjudicating authority confirmed the demand of duty and penalties, which was upheld by the Commissioner (Appeals) with a benefit of re-quantification of the demand based on cum-duty-price. Issue 2: Application of Provisions of Section 11A(1A) and (2)The appellants admitted the clandestine removal and duty liability but contended that the benefit of provisions of sub-section (1A) and two provisos of sub-section (2) of Section 11A of the Central Excise Act, 1944, effective from 13-7-2006, was not extended to them. These provisions allow an assessee to discharge the duty liability along with interest and a penalty equal to 25% of the duty within 30 days, which would render the proceedings conclusive. The Tribunal noted that the legal point of these provisions could be raised even if not presented before the lower authorities. The Tribunal found that the legislative intent behind these provisions was to settle disputes early and reduce litigation. The provisions should have been explicitly stated in the show cause notice to inform the assessee of their options. Issue 3: Duty Liability and PenaltiesThe Tribunal upheld the duty liability as quantified by the Commissioner (Appeals) in paragraph 10.6 of the impugned order, noting that the transaction value was cum-duty price and required recalculation. The Tribunal extended the benefit of Section 11A(1A) and (2) to SCPL, allowing them to discharge the duty liability, interest, and 25% of the duty as penalty within 30 days of communication from the lower authorities. This would conclude the proceedings initiated by the show cause notice dated 23-6-2008 for all noticees. Conclusion:The Tribunal disposed of all appeals, granting consequential relief by extending the benefit of the provisions of Section 11A(1A) and (2) to SCPL and associated individuals, allowing them to settle the duty liability, interest, and reduced penalty within the stipulated period.
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