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2019 (5) TMI 711 - AT - Central ExciseLevy of penalty - clearance of Cement without payment of duty for export - failure to produce copy of ARE-1 s within 24 hours of clearance of goods - failure to produce proof of export within 45 days of export as prescribed under the said Notification - suppression of facts or not - imposition of penalty - HELD THAT - It is a case of non-submission of proof of export which is a procedural lapse and accordingly the appellant has paid the duty along with interest to the extent of not submitting the proof of export. Further, the penalty envisaged under Section 11Ac read with Rule 25 is not warranted in the present case as the ingredients required for imposition of penalty such as fraud, wilful mis-statement, collusion or suppression of fact with intent to evade payment of duty is absent in the present case. Penalty u/s 11AC - HELD THAT - In the present case, the provisions of Section 11AC have not been complied with and in the absence of which imposition of penalty under Section 11AC is not sustainable in law - penalty set aside. Appeal allowed - decided in favor of appellant.
Issues:
- Imposition of penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002. - Failure to produce proof of export within stipulated time. - Allegation of concealment of material facts by the appellant. - Justification of penalty imposition by the Department. Analysis: 1. Imposition of Penalty under Section 11AC and Rule 25: The appellant argued that the penalty imposed was not legally tenable as there was no fraud, wilful misstatement, collusion, or suppression of facts with the intent to evade duty. The appellant contended that they had made efforts to obtain the re-warehousing certificate but failed to submit it, which was a procedural lapse. The appellant cited various judicial precedents to support their argument. The Tribunal found that the penalty under Section 11AC was not warranted as the required ingredients for its imposition were absent in the present case. The Tribunal emphasized the necessity of "mens-rea" for imposing penalties and referred to relevant case laws to support its decision. 2. Failure to Produce Proof of Export: The Department argued that the appellant's failure to submit proof of export amounted to concealment of material facts, justifying the penalty imposed under Section 11AC read with Rule 25 of the Central Excise Rules, 2002. However, the Tribunal noted that the appellant had paid duty along with interest for the portion where proof of export was not submitted, indicating a procedural lapse rather than intentional evasion. The Tribunal concluded that the penalty imposed for non-submission of proof of export was not justified in the absence of fraudulent intent or deliberate deception. 3. Allegation of Concealment of Material Facts: The Department contended that the appellant's failure to provide proof of export constituted concealment of material facts, justifying the penalty. However, the Tribunal found that the appellant had fulfilled their obligations by paying duty and interest where proof of export was lacking. The Tribunal emphasized that the imposition of penalties under Section 11AC required deliberate deception by the assessee with the intent to evade duty, which was not evident in this case. 4. Justification of Penalty Imposition: The Department defended the penalty imposed, citing the appellant's failure to produce proof of export as grounds for concealment of material facts. However, the Tribunal determined that the penalty under Section 11AC was not warranted as there was no evidence of fraud, wilful misstatement, collusion, or suppression of facts with the intent to evade duty. The Tribunal set aside the penalty, emphasizing the importance of compliance with the provisions of Section 11AC for penalty imposition. In conclusion, the Tribunal allowed the appeal of the appellant, setting aside the penalty imposed under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, due to the absence of fraudulent intent or deliberate deception in the non-submission of proof of export.
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