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2014 (11) TMI 745 - HC - Central Excise


Issues:
1. Imposition of mandatory penalty under Rule 57-I(4) and Section 11AC for the entire period subsequent to 28-9-1996.
2. Setting aside the appeal filed by the Department when the entire duty demanded has been paid by the first respondent.

Analysis:

Issue 1: Imposition of mandatory penalty under Rule 57-I(4) and Section 11AC for the entire period subsequent to 28-9-1996:
The case involved the respondent/assessee being issued a show cause notice demanding duty for not reversing Modvat credit availed on inputs cleared without payment of duty. The Adjudicating Authority confirmed the demand, imposed penalties under Rule 57-I(4) and Section 11AC, and Rule 173Q of the Central Excise Rules, 1944. The Commissioner (Appeals) remanded the matter to re-examine the claim and held that Rule 57-I(4) applies only in cases of fraud, wilful misstatement, etc. The Appellate Authority vacated the penalties imposed, leading to the Revenue's appeal to the Tribunal. The Tribunal dismissed the appeal, stating that the penal provision under Rule 57-I(4) had prospective effect from 23-7-1996, not 28-9-1996, and declined to interfere with the lower appellate authority's decision for the period in question. The High Court remitted the matter back to the Tribunal to consider the levy of penalty post 23-7-1996.

Issue 2: Setting aside the appeal filed by the Department when the entire duty demanded has been paid by the first respondent:
The Appellate Authority set aside the penalties imposed by the Adjudicating Authority, leading to the Revenue's appeal to the Tribunal. The Tribunal dismissed the appeal, stating that the penal provision under Rule 57-I(4) had prospective effect from 23-7-1996, not 28-9-1996, and declined to interfere with the lower appellate authority's decision for the period in question. The High Court remitted the matter back to the Tribunal to consider the levy of penalty post 23-7-1996.

In conclusion, the High Court remitted the matter back to the Tribunal to consider the levy of penalty under Rule 57-I(4) for the period post 23-7-1996, emphasizing the need for a detailed examination of the issue.

 

 

 

 

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