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2013 (8) TMI 539 - HC - Central ExciseUn-accounted Fabrics - Confiscation of Goods - Interest and Penalty u/s 11AC r.w. Rule 173 of the Central Excise Rules 1944 - Revenue found un-accounted fabrics and incriminating documents during the visit and of the view that clearance of goods without due payment of duty under the law Held that - The matter was remanded to the adjudicating authority with a direction to frame an order denovo after giving the assessee an option to pay duty amount within 30 days by making it explicitly clear in the order itself that if the assessee wanted to avail such option, he was permitted to do so - Commissioner of C. Ex & Cus. Surat-I vs. Harish Silk Mills 2010 (2) TMI 494 - GUJARAT HIGH COURT - the appeal filed by the assessee was allowed for statistical purpose and remand the matter to the Additional Commissioner to pass a fresh order in light of the observations made. It was also directed to consider the provision of section 11AC and the Tribunal had had specifically noted that none of the two authorities below had availed any option to the assessee to pay duty demand with interest and penalty of 25% of the duty within 30 days from the date of adjudication, and therefore, the Tribunal in its order impugned maintained that the case of the assessee is squarely covered by the explanation to Section 11AC - The Tribunal also noted that the duty determined u/s 11AC(2) was subsequent to the year 2000 and, therefore, the case would be covered by the explanation to Section 11AC of the Central Excise Act.
Issues Involved:
1. Whether the Tribunal committed substantial error in holding that the respondent is entitled to the benefit of reduced penalty. 2. Whether the Tribunal erred in giving the respondent the option to deposit duty, interest, and 25% of the duty amount towards penalty within 30 days. 3. Whether the Tribunal applied decisions from other cases without recording comparative facts. 4. Whether the Tribunal's order was passed in accordance with the law. Detailed Analysis: Issue 1: Entitlement to Reduced Penalty The Revenue challenged the Tribunal's decision that allowed the respondent to benefit from a reduced penalty under the explanation to the proviso of Section 11AC of the Central Excise Act, 1944. The Tribunal had given the respondent the option to pay a reduced penalty if the duty, interest, and 25% of the duty amount towards penalty were paid within 30 days of the Tribunal's order. The High Court had earlier remanded the matter to the Tribunal, directing it to consider the applicability of the proviso to Section 11AC. The Tribunal noted that the lower authorities had not given the respondent this option and thus provided it in its order, aligning with the consistent view of the High Court in similar cases. Issue 2: Option to Deposit within 30 Days The Tribunal's decision to allow the respondent to deposit the duty, interest, and 25% of the duty amount towards penalty within 30 days was challenged. The Tribunal's decision was based on precedents where it was held that if the adjudicating authority does not explicitly provide the option to the assessee, the Tribunal can do so. The High Court upheld this view, noting that the Tribunal's decision was consistent with past judgments, including the case of Commissioner of C. Ex., Ahmedabad-I vs. Akash Fashion Prints Pvt. Ltd., which supported the provision of such options to assessees. Issue 3: Application of Decisions from Other Cases The Revenue argued that the Tribunal applied decisions from other cases (e.g., M/s. Swati Chemical Industries and M/s. Akash Fashion Prints Pvt. Ltd.) without recording comparative facts. The High Court dismissed this argument, stating that the Tribunal had followed a consistent view and the decisions were relevant and applicable. The High Court reiterated that the Tribunal's approach was in line with established legal principles and past judgments. Issue 4: Order Passed in Accordance with Law The Revenue questioned whether the Tribunal's order was passed in accordance with the law. The High Court confirmed that the Tribunal's order was lawful and consistent with legal precedents. The High Court emphasized that the Tribunal had appropriately applied the provisions of Section 11AC and provided the respondent with the option to pay a reduced penalty, which was justified given the circumstances and previous judgments. Conclusion: The High Court dismissed the review application, finding no merit in the Revenue's arguments. The Tribunal's decision to provide the option for a reduced penalty was upheld, aligning with consistent judicial views and legal precedents. The High Court confirmed that the Tribunal's order was lawful and appropriately applied the provisions of Section 11AC of the Central Excise Act, 1944.
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