2019 (6) TMI 1143 - HC - Central Excise

Extended period of Limitation - Section 11A(1) of Central Excise Act - denial of benefit of the CENVAT when the appellant has accepted the demand - HELD THAT - The finding on facts as found by the Tribunal the appellant has not paid excise duty on the goods cleared for home consumption for the period of 3 years nor followed any excise procedures. The non-payment of excise duty and not following of excise procedures came to light only because of intelligence received by the Revenue and subsequent visit to the respondent's factory. It is to be noted that the appellant has not disputed duty liability and interest - the occasion to consider the issue of demand being barred by time does not arise. Penalty - HELD THAT - The plea of ignorance of law is the only defense / submission for non imposition of penalty. The appellant is a limited company and is in the business of manufacturing of jaggery and jaggery powder. The plea of ignorance of law cannot be accepted as stated in the well known maxim Ignorantia Juris Non Excusct i.e. ignorance of law is no excuse. The questions proposed in these facts, do not give rise to any substantial question of law - appeal dismissed.

Summary

Issues:
1. Challenge to the order passed by the Customs, Excise and Service Tax Appellate Tribunal under Section 35G of the Central Excise Act, 1944.
2. Questions of law raised by the appellant regarding the extended period of limitation for issuing the show-cause notice and the denial of CENVAT benefit.

Analysis:
1. The appellant, engaged in the manufacture of excisable goods, was found to have not complied with Central Excise law and procedure, leading to a show-cause notice for recovery of excise duty, interest, and penalty. The Tribunal confirmed the notice and penalty, stating that ignorance of law cannot be a defense for noncompliance with excise procedures and nonpayment of duty.

2. The appellant argued that the person in charge was a farmer unaware of excise procedures, and even if duty had been paid, CENVAT credit could have been used to discharge the duty on jaggery and jaggery powder. However, the Tribunal found that the appellant had not paid excise duty for three years, and ignorance of law cannot excuse noncompliance. The Tribunal's decision was upheld, emphasizing that ignorance of law is not a valid defense, and the plea lacked supporting evidence.

3. The Court noted that the appellant did not dispute the duty liability and interest, and the nonpayment of duty and failure to follow excise procedures were only discovered due to intelligence received by the Revenue. The plea of ignorance of law was rejected based on the principle that ignorance of law is no excuse, as it would be impossible to refute if accepted by all. The Court upheld the Tribunal's decision, stating that the questions raised did not present any substantial legal issues.

4. Consequently, the appeal was dismissed, and the Notice of Motion was also deemed infructuous. The Court affirmed the Tribunal's decision regarding the imposition of penalty under Section 11AC, emphasizing that ignorance of law cannot justify nonpayment of excise duty or noncompliance with procedures.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the Court's reasoning behind dismissing the appeal and upholding the Tribunal's decision.