2012 (8) TMI 839 - AT - Central Excise

Duty demand - Penalty u/s 11A(1A) - Held that - Provisions in the first proviso to Section 11A(2) covers the situation under consideration and for that reason no proceedings could have been continued against the respondents after the manufacturers complied with the provisions of Section 11A(1A) - Decided against Revenue.

Summary

Issues:
1. Imposition of penalty on a respondent after manufacturers paid excise duty, interest, and penalty.
2. Interpretation of provisions under Section 11A(1A) and 11A(2) of the Central Excise Act.
3. Appeal against the order of the Commissioner (Appeals) by Revenue.

Analysis:
1. The judgment deals with the issue of imposing a penalty on a respondent after manufacturers paid excise duty, interest, and penalty. The manufacturers had already settled their liabilities under Section 11A(1A) of the Central Excise Act. The Commissioner (Appeals) set aside the penalties imposed on the respondents, stating that once the manufacturers had fulfilled their obligations under Section 11A(1A), proceedings against all parties should conclude. The Revenue, however, appealed this decision, arguing that the provisions of Section 11A(1A) only benefit the assessee who directly paid the duty, interest, and penalty, not others involved in abetting duty evasion.

2. The interpretation of provisions under Section 11A(1A) and 11A(2) of the Central Excise Act was crucial in this case. The Counsel for the appellant highlighted the first proviso to Section 11A(2), which states that if the duty, interest, and penalty are paid in full under sub-section (1A), proceedings against all parties mentioned in the notice shall be deemed conclusive. The Counsel argued that only prosecution proceedings in a court could continue against other persons connected with the duty evasion, not adjudication proceedings. The Tribunal found that the first proviso to Section 11A(2) covered the situation at hand, indicating that proceedings against the respondents could not continue once the manufacturers had complied with Section 11A(1A).

3. In the appeal against the order of the Commissioner (Appeals) by Revenue, the Tribunal rejected the appeals filed by Revenue. The Tribunal's decision was based on the interpretation of the relevant provisions of the Central Excise Act, specifically Section 11A(1A) and 11A(2). The Tribunal upheld the Commissioner (Appeals) decision that once the manufacturers had settled their liabilities, proceedings against all parties involved should conclude, as per the statutory provisions. The judgment clarified that the benefit of settling liabilities extended to all parties mentioned in the notice, not just the direct assessee who paid the duty, interest, and penalty.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Tribunal's decision based on the interpretation of the relevant legal provisions.