2015 (12) TMI 663 - AT - Central Excise

Waiver of penalty and interest - penalties under Section 11AC - Invocation of extended period of limitation - Held that - This is the case where the appellants have cleared the cotton yarn dyed woven fabrics without payment of excise duty whereas they collected the Central Excise duty from the customers and the same was not remitted to government account. I find that the adjudicating authority confirmed the demand of 34, 72, 714/- and appropriated the amount of 13, 11, 900/- and imposed equal penalty under Section 11Ac and also equal penalty under rule 25 on the appellants as well as on the partner of the company. Whereas the LAA in his findings considered the appellants plea and reduced the duty amount based on verification report received from the adjudicating authority - As regards invoking extended period intention to evade payment of duty which was already collected but not remitted to the government is suppression of facts has been clearly established and the same was admitted by the appellant and paid the duty amount - reduced demand ordered by LAA and consequent Section 11AC penalty and interest is liable to be upheld. Therefore I do not find any infirmity in the impugned order in so far as the demand and Section 11AC penalty and demand of interest - Decided against assessee.

Summary

Issues:
- Clandestine removal of cotton yarn dyed woven fabrics without duty payment
- Failure to remit duty collected from customers
- Invocation of extended period for demand
- Reduction of penalty under Section 11AC
- Applicability of penalties under Rule 25 and Rule 26
- Waiver of penalty and interest after payment of reduced duty amount

Analysis:
1. Clandestine Removal and Duty Payment:
- The case involved the clandestine removal of cotton yarn dyed woven fabrics without duty payment and failure to remit collected duty. The adjudicating authority confirmed a demand of Rs. 34,72,714 and imposed penalties under Section 11AC and Rule 25 on the appellant and the managing partner.

2. Invocation of Extended Period:
- The appellant argued that the demand was time-barred as they had paid a major part of the duty before the issuance of the show-cause notice. However, the authority invoked the extended period due to the intentional evasion of duty payment.

3. Reduction of Penalty under Section 11AC:
- The Commissioner (Appeals) reduced the duty payment and penalties under Section 11AC based on a verification report. The reduced duty amount was Rs. 16,96,151, and the appellant paid the balance of Rs. 3,84,251, leading to a waiver request for penalties and interest.

4. Applicability of Penalties under Rule 25 and Rule 26:
- The penalties under Rule 25 were set aside by the Commissioner (Appeals) based on the verification report, which allowed for a reduction in the duty demand and penalties.

5. Waiver of Penalty and Interest:
- The issue primarily revolved around the waiver of penalties and interest after the appellant paid the revised duty amount. The Tribunal upheld the reduced demand, penalties under Section 11AC, and interest based on applicable legal precedents.

6. Legal Precedents and Decisions:
- The Tribunal referred to various legal precedents, including decisions by the Supreme Court and High Courts, to support the reduced demand, penalties, and interest upheld in the case. The judgments emphasized the consequences of intentional duty evasion and the invocation of extended periods for demand.

7. Final Decision:
- The Tribunal upheld the reduced demand, penalties under Section 11AC, and interest, dismissing the appellant's appeal. The decision was based on the appellant's admission of non-remittance of duty collected from customers and the intentional evasion of duty payment, supported by legal precedents.

This detailed analysis highlights the key aspects of the judgment, including the arguments presented, the authorities' decisions, the legal precedents cited, and the final outcome of the case.