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2017 (5) TMI 329 - AT - Central ExcisePenalty u/s 11AC - M/s.BPCL had cleared one consignment of ATF from the refinery on 25/12/2004 under bond. However, the same was shown as duty paid receipt at M/s.BPCL ASF Santacruz, Mumbai. Duty of ₹ 12,17,948/- was subsequently paid on 05/03/2005 and interest was also paid on 10/03/2006 on delayed payment of duty - Held that - the penalty u/s 11AC can be imposed only when non-paid/short paid duty was not paid with intent to evade payment of duty and the same is liable to be paid as determined under sub-section (2) of Section 11A - In the present case, since there is no SCN proposing demand. Firstly, there is no duty which is short paid or non-paid. Secondly, the duty so paid by the appellant was not determined by carrying out the exercise as provided under sub-section (2) of Section 11A, ie., adjudication of duty demand. Therefore, in the fact of the present case, the ingredients for imposition of penalty under Section 11AC is absent - penalty set aside - appeal allowed - decided in favor of appellant.
Issues involved:
Whether penalty under Section 11AC is imposable on the appellants for delayed payment of duty. Analysis: The case involved a dispute regarding the imposition of a penalty under Section 11AC on the appellants. The facts of the case revolved around a consignment of ATF cleared by M/s.BPCL under bond, which was later shown as duty paid at a different location. The duty amount was paid later along with interest, and a show-cause notice was issued proposing only the imposition of the penalty under Section 11AC. The adjudicating authority and the Commissioner (Appeals) upheld the penalty, leading to the appeal before the tribunal. The appellant contended that they had paid the duty along with interest suo moto and argued that the penalty under Section 11AC should only be imposed when duty is determined under sub-section (2) of Section 11A. They emphasized that this was a case of delayed payment, not non-payment or short payment of duty, and therefore, no penalty should be imposed. On the other hand, the Revenue representative reiterated the findings of the impugned order, supporting the imposition of the penalty. After considering the arguments from both sides, the tribunal examined the relevant legal provisions, specifically Section 11AC of the Central Excise Act, 1944. The tribunal noted that the penalty under Section 11AC is applicable when duty has not been levied or paid, or there has been short-levy or short-payment due to specific reasons, including intent to evade duty payment. Importantly, the penalty is to be imposed on the person liable to pay duty as determined under sub-section (2) of Section 11A. The tribunal highlighted that in the present case, no show-cause notice was issued for the determination of duty under sub-section (2) of Section 11A. As the duty was paid by the appellant without undergoing the adjudication process, the essential requirements for imposing a penalty under Section 11AC were not met. Consequently, the tribunal concluded that the penalty was wrongly imposed and upheld by the lower authorities. Therefore, the penalty was set aside, and the appeal was allowed, leading to the setting aside of the impugned order. In conclusion, the tribunal's detailed analysis focused on the legal provisions and the specific circumstances of the case to determine the correctness of imposing a penalty under Section 11AC for delayed payment of duty, ultimately ruling in favor of the appellant and overturning the penalty decision made by the lower authorities.
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