2013 (12) TMI 1391 - AT - Central Excise

Penalty u/s 11AC - Held that - The assessee s intention was not to evade payment of duty as the assessee extended all possible help to finalise the issue - The appellants supplied the computerized ledger and paid the amount at the spot along with interest - The clearing of duty and part of interest prior to the completion of the proceedings pointed out their bona fide intention - As there was no intention to evade payment of duty by way of suppression of facts or misrepresentation penalty u/s 11AC cannot be imposed - Decided in favour of assessee.

Summary

Issues involved:
1. Imposition of penalty under Section 11AC of Central Excise Act.

Analysis:
The appeal was filed against an order imposing a penalty under Section 11AC of the Central Excise Act by the Commissioner (Appeals) on the appeal filed by the Revenue. The case involved the manufacturing of vegetable oil, which was exempted from duty, with certain by-products cleared at nil rate of duty. The Revenue demanded duty, which the appellant paid along with interest. The adjudicating authority did not impose a penalty under Section 11AC initially, but the Commissioner (Appeals) later imposed the penalty.

The Tribunal found that penalty under Section 11AC can be imposed when there is an intention to evade duty through specific means listed in the Section. In this case, it was noted that the appellant had cooperated with the authorities by providing production records, ledger accounts, and paying duty along with interest promptly. The adjudicating authority acknowledged the appellant's cooperation and found no intention to evade duty. Since the appellant had not suppressed any facts and assisted the Revenue in finalizing the issue, the Tribunal concluded that there was no merit in imposing the penalty under Section 11AC. Therefore, the impugned order imposing the penalty was set aside, and the appeal was allowed.

The Tribunal's decision was based on the lack of evidence showing any intention to evade duty through suppression of facts or misrepresentation. The appellant's cooperation, prompt payment of duty, and assistance to the Revenue authorities were considered as indicators of a bona fide intention. As a result, the Tribunal held that the circumstances did not warrant the imposition of a penalty under Section 11AC of the Central Excise Act. The decision emphasized the importance of considering the taxpayer's conduct and cooperation in determining the applicability of penalties under the law.