9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (5) TMI 653 - AT - Central Excise100% EOU - removal of goods to DTA - Job-work - entire activity was carried out without intimation to the Customs authorities, without de-bonding of capital goods and without obtaining permission of the Development Commissioner to remove the finished goods into DTA - Penalty u/s 11AC - HELD THAT - As per Section 11AC(1)(2), it is clear that where any duty is determined under sub-section (10) of Section 11A and the interest payable thereon under Section 11AA in respect of transactions referred to in clause (b) is paid within 30 days of the date of communication of the order of the Central Excise officer who has determined such duty, the amount of penalty liable to be paid by such person shall be 25% of the duty so determined - it is clear that this option of paying 25% will commence from the date of the appellate order. The appellant is only liable to pay 25% of the actual duty as penalty which works out to ₹ 4,66,692/- - appeal allowed in part.
Issues Involved:
1. Confiscation of goods and demand of duty along with interest and penalty. 2. Quantum of penalty under Section 11AC of the Central Excise Act. 3. Applicability of reduced penalty if duty and interest are paid before issuance of show-cause notice. 4. Interpretation of Section 11AC and its proviso regarding penalty reduction. Detailed Analysis: 1. Confiscation of Goods and Demand of Duty Along with Interest and Penalty: The appellants, a 100% EOU, became defunct and sold their plant without informing the Customs authorities or obtaining necessary permissions. They admitted to carrying out job work without prior permission and pre-deposited ?30 lakhs. A show-cause notice was issued for confiscation of goods and demand of duty along with interest and penalty. The adjudicating authority confirmed the demand, which was upheld by the Commissioner(Appeals) with a reduced penalty. The appellants appealed to the CESTAT, which remanded the case for requantification of duty and penalty. 2. Quantum of Penalty Under Section 11AC of the Central Excise Act: The CESTAT directed the adjudicating authority to requantify the duty and redetermine the penalty under Section 11AC, ensuring it did not exceed the amount determined by the Commissioner(Appeals). Upon requantification, the duty was reduced to ?18,66,768/- from ?32,34,540/-, and a penalty of ?16 lakhs was imposed. The appellant contested this penalty before the Commissioner(Appeals), which was rejected, leading to the present appeal. 3. Applicability of Reduced Penalty if Duty and Interest are Paid Before Issuance of Show-Cause Notice: The appellant argued that since they pre-deposited ?30 lakhs, covering duty and interest, before the issuance of the show-cause notice, no penalty should be imposed. They cited several decisions supporting this view. However, the tribunal noted that the appellant's case involved suppression of facts with intent to evade duty, making the cited decisions inapplicable. 4. Interpretation of Section 11AC and its Proviso Regarding Penalty Reduction: The tribunal examined Section 11AC, which stipulates that if duty and interest are paid within thirty days of the communication of the order, the penalty should be 25% of the duty determined. The tribunal referred to various judgments, including the Hon’ble Madras High Court's decision in AP Steels, which clarified that the option to pay a reduced penalty commences from the date of the appellate order. Conclusion: The tribunal concluded that the appellant is liable to pay only 25% of the actual duty as a penalty, amounting to ?4,66,692/- (25% of ?18,66,768/-). Therefore, the imposition of a ?16 lakhs penalty was set aside, and the appeal was partly allowed. (Order was pronounced in Open Court on 07/05/2019)
|
