2024 (7) TMI 267 - HC - Central Excise

Issuance of SCN in view of the specific provision of Section 11A(2B) of the Central Excise Act, 1944 as it existed at the relevant point of time - HELD THAT - In the order-in-original itself that the adjudicating authority has mentioned that the entire amount of duty of Rs.4,13,18,733/- and interest of Rs.68,24,912/- was deposited by the respondent/assessee vide challan No.00326 dated 06.05.2012. The remaining amount of interest of Rs.10,542/- was also paid by the assessee vide challan No.00115 dated 19.07.2013. The demand-cum-show cause notice was issued by the adjudicating authority on 14.08.2012 i.e. much subsequent to the deposit of the amount of duty along with interest. There is no factual dispute that the entire amount of duty along with interest was deposited by the assessee much prior to the issuance of notice. It is also admitted fact that information about the aforesaid deposit of the amount of duty and interest was given by the assessee to the Central Excise Officer concerned - the provisions of sub-Section (2B) of Section 11A of the Central Excise Act, 1944 is fully attracted on facts of the present case which specifically provides the circumstance in which the Central Excise Officer shall not serve any notice under sub-Section (1) of Section 11A of the Act, 1944 in respect of the duties paid. Section 11A(2B) is fully attracted on facts of the present case. There are no irregularity in the findings recorded by the Tribunal in paragraph 6 of the impugned order - appeal dismissed at admission stage.

Summary

Issues:
1. Interpretation of Section 11A(2B) of the Central Excise Act, 1944.
2. Validity of the Tribunal's decision to set aside the penalty imposed on the appellant.
3. Applicability of the provisions regarding duty payment and issuance of show cause notice.

Analysis:
1. The case involved a dispute regarding the payment of duty amounting to Rs. 4,13,18,733/- along with interest, by the respondent before the issuance of a demand-cum-show cause notice. The adjudicating authority confirmed the demand and imposed a penalty equivalent to the duty amount. The Tribunal allowed the appeal based on Section 11A(2B) of the Central Excise Act, noting that no show cause notice was required as the duty was paid before any notice was served.

2. The appellant contended that the Tribunal erred in setting aside the penalty, while the respondent argued that Section 11A(2B) precluded the issuance of a show cause notice in such circumstances. The Tribunal's decision was based on the fact that the duty and interest were paid before any notice was served, as required by the provision, thus no penalty could be imposed.

3. The High Court examined the facts and provisions of Section 11A(2B) in detail. It noted that the duty and interest were deposited before the issuance of the notice, as per the records. Section 11A(2B) specifically states that no notice shall be served if the duty is paid before the notice, and penalties shall not be imposed in such cases. The Court found that the provision was correctly applied by the Tribunal, and no substantial question of law was involved in the appeal.

In conclusion, the High Court dismissed the appeal, affirming the Tribunal's decision to set aside the penalty based on the provisions of Section 11A(2B) of the Central Excise Act, 1944. The Court found no irregularity in the Tribunal's findings and held that the appeal lacked merit at the admission stage.