2009 (7) TMI 1048 - AT - Central Excise

Summary

Issues:
Imposition of penalty under Section 11AC of the Central Excise Act, 1944.

Analysis:
The appellants contested the penalty imposed under Section 11AC of the Act, which was equal to the confirmed demand. They argued that they had cleared goods to Ship Builders by availing the benefit of Notification No. 64/95-C.E. and reflected this in the RT-12 Returns. The Tribunal's decision in another case had denied the benefit of the Notification for goods not supplied as ship-stores. The appellants did not contest the duty demand but claimed they had not suppressed any facts to evade duty payment, as they had disclosed clearances in their RT-12 Returns. They also cited a previous Tribunal decision that the extended limitation period was not applicable for demands confirmed on similar grounds. The Revenue contended that the appellants, by wrongly availing the Notification benefit, were liable for penalty under Section 11AC.

In the judgment, it was noted that the appellants were only challenging the penalty under Section 11AC. The provision mandates penalty equal to the demand amount in cases involving fraud, collusion, misstatement, or suppression of facts to evade duty payment. The appellants had cleared goods using the Notification benefit, duly reflected in the RT-12 Returns, without any dispute. The court found merit in the appellants' argument that there was no intent to evade duty payment through suppression, misstatement, or fraud. Consequently, the impugned Order imposing penalty under Section 11AC was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the core issue of penalty imposition under Section 11AC of the Central Excise Act, 1944. The case involved a dispute regarding the availing of Notification benefits and the subsequent penalty imposed, with the court ultimately ruling in favor of the appellants based on the absence of intent to evade duty payment through suppression or misstatement.