2016 (4) TMI 1322 - AT - Central Excise

Issuance of fresh SCN for penal provisions - power of Commissioner (Appeals) to instruct the Department for issuance of fresh SCN - Held that - Since the Commissioner (Appeals) has held that penalty cannot be invoked under Section 11AC, he could have straightaway, allowed the appeal without insisting for issuance of fresh show cause notice seeking imposition of penalty under Rules 57AH and 173Q of erstwhile Central Excise Rules, 1944 and the present Rules 12 and 13 of Cenvat Credit Rules, 2001, which were not proposed for recovery in the original proceedings. Since the Commissioner (Appeals) has travelled beyond the proposals made in the original show cause notice dated 11th March, 2005, directions for issuance of subsequent show cause notice is not in conformity with law - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Dismissal of Revenue's appeal due to monetary limit.
2. Empowerment of Commissioner (Appeals) to instruct Department for fresh show cause notice.
3. Invocation of penalty under Section 11AC and issuance of subsequent show cause notice.

Analysis:
1. The judgment begins by addressing the appeal filed by both sides against the impugned order passed by the Commissioner (Appeals). The Revenue's appeal is dismissed as the amount involved is below the monetary limit set by the Board for appeal filing, in accordance with the litigation policy and Instructions issued by the C.B.E. & C. This dismissal is based on the monetary threshold criteria.

2. The grievance raised by the assessee in the appeal pertains to the Commissioner (Appeals) allegedly lacking the authority to direct the Department to issue a fresh show cause notice invoking penal provisions. The judgment delves into the Commissioner's decision regarding the empowerment to instruct the Department for such notice, highlighting a discrepancy in the Commissioner's actions.

3. The judgment further scrutinizes the Commissioner (Appeals)'s ruling on the invocation of penalties under Section 11AC, emphasizing that penalties cannot be imposed under this section. It is noted that the Commissioner's directive for a subsequent show cause notice seeking penalties under specific rules was beyond the scope of the original proceedings. Consequently, the judgment sets aside the impugned order, allowing the appeal in favor of the appellant, M/s. Orient Paper Mills, Bhopal. The decision clarifies the legal boundaries concerning penalty imposition and the necessity for adherence to the proposals outlined in the initial show cause notice.