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2015 (10) TMI 1920 - AT - Central ExciseDemand of Differential duty - Penalty u/s 11AC - Invocation of extended period of limitation - Held that - Appellants were issued with SCN alleging suppression of facts for the subsequent period after the above OIO dt. 30.3.2007. Once the department has accepted the RTP price determined by the appellants in the above order, there is no justification for invoking the suppression for imposition of penalty. Further considering the period involved relates to the transitional period when all the oil industry, PSUs switched over to different mechanism of payment of excise duty on the petroleum products from ware house to the Refinery itself and also considering the fact that there was no sale of CBFS as it is captively consumed by IOCL there is no suppression of facts with an intent to evade excise duty. In order to invoke suppression of facts for imposition of penalty under Section 11AC, there should be mens rea as settled by the Hon ble Supreme Court in the case of Uniworth Textiles Ltd. Vs CCE Raipur - 2013 (1) TMI 616 - SUPREME COURT. Whereas in the present case Revenue has not come out with any evidence on allegation of suppression of facts, whereas it is established beyond doubt that appellants have clearly informed the facts to the department on 19.10.2004 which is on record. - there is no justification for invoking Section 11AC for imposition of equal penalty liable for imposition of penalty under Section 11AC - Decided in favour of assessee.
Issues:
Appeal against OIO passed by Commissioner of Central Excise, LTU, Chennai regarding differential duty demand on Carbon Block Feed Stock (CBFS) and waiver of penalty. Analysis: The appeal was filed against the OIO passed by the Commissioner of Central Excise, LTU, Chennai, confirming a duty demand on CBFS and imposing a penalty. The appellant, a Public Sector Undertaking, manufactured petroleum products and cleared CBFS during a specific period. The adjudicating authority confirmed the duty demand for the period from Sept 04 to Dec 05 under Section 11A(1) and imposed a penalty under Section 11AC. The main contention in the appeal was the waiver of penalty. Upon hearing both sides, the appellant's advocate argued that the duty amount along with interest was paid before adjudication, and 25% of the duty towards penalty was paid promptly. The appellant had informed the jurisdictional AC about the duty liability on CBFS based on Refinery Transfer Price (RTP) immediately after the withdrawal of warehousing provisions. The advocate emphasized that there was no suppression of facts and pleaded for penalty waiver citing the acceptance of RTP in previous orders and the absence of mens rea to evade duty. On the contrary, the Revenue reiterated the findings of the OIO and stated that CBFS was not covered in earlier orders, justifying the imposition of equal penalty for suppression of facts. After reviewing the submissions and records, the Tribunal noted that the issue revolved around the imposition of penalty under Section 11AC, as the duty and interest were already paid and appropriated. The transitional period from warehouse to refinery duty payment mechanism was crucial. The Tribunal observed that the appellant had duly informed the authorities about the duty liability on CBFS based on RTP, which was accepted in a previous order. As there was no evidence of suppression of facts or intent to evade duty, the Tribunal held that there was no justification for invoking Section 11AC for penalty imposition. Citing the Uniworth Textiles Ltd. case, the Tribunal emphasized the absence of mens rea and the appellant's transparency in disclosing facts. Consequently, the order imposing penalty under Section 11AC was set aside, and the appeal was allowed.
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