2013 (5) TMI 571 - AT - Central Excise

Imposition of penalty - willful suppression of facts - Held that - The adjudicating authority while passing the order in original has nowhere discussed in the findings that how the elements of suppression of facts with an intention to evade duty are established.In the absence of same it is felt that no penalty under Rule 15 (2) is not imposable. In favour of assessee.

Summary

Issues: Appeal against imposition of penalty under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section-11 AC of the Central Excise Act, 1944.

In the judgment delivered by the Appellate Tribunal CESTAT AHMEDABAD, the issue at hand was an appeal filed against the Order in Original (OIA) dated 30/01/2012, where the Adjudicating Authority's decision was upheld, specifically contesting the imposition of penalty under Rule 15 (2) of the Cenvat Credit Rules, 2004 read with Section-11 AC of the Central Excise Act, 1944. The appellant argued that there was no fraud or willful suppression of facts, citing various judgments to support their stance. On the other side, the respondent relied on a case where clear suppression of facts was found. However, the Tribunal noted that there was no clear indication in the show-cause notice or the orders about how the elements of suppression of facts with an intention to evade duty were established. The appellant had paid the entire duty amount along with interest upon notification by the department. The Tribunal concluded that in the absence of willful suppression with intention to evade duty and considering the appellant's conduct, no penalty under Rule 15 (2) was imposable. Therefore, the appeal was allowed by modifying the Order in Appeal to only impose a penalty.

This judgment highlights the importance of establishing willful suppression of facts with an intention to evade duty when imposing penalties under Rule 15 (2) of the Cenvat Credit Rules, 2004. The Tribunal emphasized the necessity for clear evidence and discussion in the findings regarding the elements of suppression of facts to justify penalty imposition. It also underlined the significance of the appellant's conduct, noting that the payment of duty upon notification by the department played a crucial role in the decision. By analyzing the arguments presented by both parties and referencing relevant case laws, the Tribunal meticulously assessed the circumstances of the case to arrive at a well-reasoned decision.

The judgment serves as a reminder to adjudicating authorities and appellate bodies to thoroughly evaluate the evidence and reasoning behind penalty impositions in excise matters. It underscores the requirement for a clear establishment of willful suppression of facts with an intention to evade duty before penalizing the concerned party. Additionally, the judgment highlights the significance of transparency in the adjudication process, emphasizing the need for detailed discussions and findings to support penalty decisions. Overall, the case sets a precedent for fair and reasoned decision-making in excise duty matters, ensuring that penalties are imposed judiciously based on concrete evidence and legal principles.