9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2014 (11) TMI 778 - HC - Central ExcisePenalty u/s 11AC - Suppression of facts - Intention for evasion of duty - whether the Tribunal is justified in reducing the imposition of penalty - Held that - There was wilful suppression of facts and fraud committed by the assessee with an intention to evade payment of duty as recorded by the Original Authority as well as the First Appellate Authority was confirmed by the Tribunal and the assessee has not preferred any appeal as regards this finding before this Court. The question therefore is once the ingredients required for applying Section 11AC of the Central Excise Act was made out, whether the Tribunal is justified in reducing the imposition of penalty which was imposed equivalent to that of differential duty. once Section 11AC of the Central Excise Act is applicable, there is no justification in quantifying the amount and the penalty imposed must be equivalent to the differential duty re-determined under Section 11A of the Central Excise Act, 1944. Referring to the decision in the case of Union of India v. Dharmendra Textile Processors reported in 2008 (9) TMI 52 - SUPREME COURT , the Supreme Court pointed out that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the authority concerned would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. - Decided in favour of revenue.
Issues:
Reduction of penalty under Section 11AC of the Central Excise Act by the Tribunal. Analysis: 1. Background and Allegations: The case involved an appeal by the Revenue against the Final Order passed by the Customs, Excise and Service Tax Appellate Tribunal. The appellant alleged that the respondent had suppressed facts regarding the revision in the price of raw materials, leading to evasion of Central Excise Duty. The appellant sought to impose penalties under Section 11AC of the Central Excise Act, 1944. 2. Adjudication and Appeals: The respondent submitted a reply denying the allegations, but the Original Authority found suppression of facts beyond doubt and invoked the proviso to Section 11A of the Act. The Commissioner of Central Excise (Appeals) upheld the decision, emphasizing the intentional suppression and fraud by the assessee. The Tribunal confirmed the suppression but reduced the penalty imposed under Section 11AC to Rs. 1,00,000, leading to the Revenue's appeal. 3. Tribunal's Decision and Legal Considerations: The Tribunal acknowledged the willful suppression by the assessee but deemed the penalty under Section 11AC excessive, reducing it to Rs. 1,00,000. However, the High Court analyzed relevant legal precedents, including the Supreme Court's rulings in cases like Rajasthan Spinning and Weaving Mills and Union of India v. Dharmendra Textile Processors. These cases emphasized that once Section 11AC applies, the penalty must be equivalent to the differential duty determined under Section 11A, without discretion in quantifying the amount. 4. High Court Judgment: In light of the legal principles established by the Supreme Court, the High Court set aside the Tribunal's decision to reduce the penalty under Section 11AC and restored the penalty imposed by the Original Authority. The Court held that once the conditions for applying Section 11AC are met, the penalty must be equal to the duty determined under Section 11A. Consequently, the Civil Miscellaneous Appeal by the Revenue was allowed, with no costs imposed. This detailed analysis of the judgment highlights the legal intricacies involved in the reduction of penalties under Section 11AC of the Central Excise Act and the application of relevant legal precedents in determining the appropriate penalty amount.
|
