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2012 (2) TMI 103 - HC - Central ExciseBenefit of section 11AC denied duty confirmed together with penalty & interest Rs 8 lacs deposited against duty liability of 17.88 lacs - Held that - In the present case, it is clear from the conduct of the assessee that he never wanted or showed any inclination to pay the duty amount or the interest and was throughout contesting the order in original on merits. In case the assessee had any grievance with regard to non-compliance of Section 11AC, the said grievance should have been raised at the earliest opportunity. The appellant should have deposited the duty amount. Therefore, we hold that no substantial question of law arises Decided against the assessee.
Issues Involved:
1. Imposition of penalty under Section 11AC of the Central Excise Act, 1944. 2. Appellant's contention on the benefit of reduced penalty under the first proviso to Section 11AC. 3. Tribunal's dismissal of the rectification application. 4. Appellant's conduct and payment history. 5. Relevance of previous judgments and circulars. Issue-wise Detailed Analysis: 1. Imposition of Penalty under Section 11AC of the Central Excise Act, 1944: The appellant was penalized under Section 11AC of the Central Excise Act, 1944, for the duty evasion of Rs. 17,88,262/- during 1999-2001. The operative portion of the original order dated 5th March 2004 confirmed the duty demand, imposed an equivalent penalty, and demanded interest under Section 11AB. 2. Appellant's Contention on the Benefit of Reduced Penalty: The appellant argued that the Assessing Officer should have explicitly stated in the final order that if the appellant paid the disputed tax and interest along with 25% penalty within 30 days, they would not be liable for the full 100% penalty. The appellant cited several judgments, including K.P. Pouches (P) Limited versus Union of India, to support their claim. 3. Tribunal's Dismissal of the Rectification Application: The Customs, Excise, and Service Tax Appellate Tribunal dismissed the appellant's rectification application, which had sought a review of the penalty imposition. The High Court had previously dismissed an appeal on 25th January 2011, suggesting that the Tribunal should address the penalty contention first. 4. Appellant's Conduct and Payment History: The appellant's conduct showed a lack of interest in availing the benefit of the reduced penalty under Section 11AC. Despite the order in original being passed on 5th March 2004, the appellant did not pay the duty amount or interest within the stipulated period. The appellant's payments totaled Rs. 8 lacs, significantly less than the duty demand of Rs. 17,88,262/-. 5. Relevance of Previous Judgments and Circulars: The decision in K.P. Pouches (P) Limited was distinguished as the assessee in that case had paid the full duty before the show cause notice. The High Court emphasized that the appellant never intended to pay the duty or interest and contested the order on merits. The Tribunal's circulars and the decision of the Punjab and Haryana High Court in J.R. Fabrics (P) Limited were also found distinguishable based on the factual matrix of the present case. Conclusion: The High Court concluded that the appellant's conduct indicated no intention to pay the duty amount or interest, and hence, the benefit of the first proviso to Section 11AC was not applicable. The appeal was dismissed, and no substantial question of law was found to arise.
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