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2023 (5) TMI 135 - AT - Central ExciseLevy of Equal amount of penalty under Section 11AC of the Central Excise Act, 1944 - Extended period of Limitation - HELD THAT - The issue decided in the case of M/S QUIPPO ENERGY PRIVATE LTD, SHRI MONTU PATWA VERSUS COMMISSIONER, CENTRAL EXCISE SERVICE TAX, AHMEDABAD 2015 (10) TMI 1726 - CESTAT AHMEDABAD where it was held that the activities undertaken by the Appellant would amount to manufacture and Power Pack also known as Containerized Gensets would be classifiable under sub-heading No. 8502.2090 of the Schedule to the Central Excise Tariff Act, 1985 and the demand of duty alongwith interest for the normal period is upheld. It can be seen that it was categorically held that since there is no suppression of fact, demand of extended period is not sustainable. The penalty imposed in the impugned order was held to be not warranted accordingly, the same was set aside. When the penalty imposed under Section 11AC was set aside, the revenue s appeal cannot be sustained - the revenue s appeal is dismissed.
Issues involved:
The imposition of penalty under Section 11AC of the Central Excise Act, 1944. Summary: Issue 1: Imposition of penalty under Section 11AC The revenue sought to impose an equal amount of penalty under Section 11AC, challenging the penalty of Rs.1 lakh imposed by the adjudicating authority. The revenue argued that the penalty should be equal to the duty amount of Rs. 3,45,34,494 as per Section 11AC. Issue 2: Challenge by the Respondent The Respondent challenged the demand of duty and penalty in an appeal before the tribunal. The tribunal confirmed the demand for the normal period but set aside the demand for the extended period and the penalty imposed under Section 11AC. The Respondent argued that the penalty under Section 11AC cannot be enhanced as appealed by the revenue. Issue 3: Tribunal's Decision The tribunal found that there was no suppression of facts with intent to evade payment of duty. Citing previous judgments, the tribunal held that the extended period of limitation cannot be invoked in cases of revenue neutrality. The tribunal concluded that the imposition of penalties on the Appellants was not warranted as they acted under a bonafide belief. Issue 4: Final Decision The tribunal upheld the demand of duty along with interest for the normal period, classifying the goods under the appropriate sub-heading. The tribunal directed the extension of CENVAT Credit benefit while quantifying duty and set aside the demand of duty for the extended period, as well as confiscation and imposition of penalties. The appeal by the Appellant company was disposed of accordingly. Issue 5: Dismissal of Revenue's Appeal As the penalty imposed under Section 11AC was set aside in the Respondent's appeal, the revenue's appeal was dismissed. The tribunal pronounced the decision in open court on 02.05.2023. This judgment highlights the importance of bonafide belief, lack of suppression of facts, and adherence to legal provisions in determining the imposition of penalties under the Central Excise Act, 1944.
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