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TMI Blog2010 (2) TMI 557X X X X Extracts X X X X X X X X Extracts X X X X ..... n (3) of Section 3-A of the Act to the tune of Rs. 3,05,956/- for the period October and November 1998 and Rs. 5,25,117/- for the period January, 1999 to May, 1999. 2. The revenue claimed that the assessee did not pay the duty, therefore, show cause notices were issued as to why the duty short paid/not paid be not demanded under Section 11A of the Act and Rules alongwith interest. The imposition of penalty was also proposed under Rule 96ZP of the Rules. In the wake of show cause notices, the assessee filed the reply, in which it admitted the non-payment of duty, but tried to explain that the short payment was on account of difference of opinion, as the assessee claimed the relief for the period when its unit remained closed for more than seven days continuously under section 3A(3) of the Act and this benefit could not be taken away by the Rules. According to the assessee that since there was conflict between the main Act and Rules, so the short payment was only on account of the difference of opinion. 3. The explanation of the assessee did not find favour and the Adjudicating Authority observed that the assessee had wrongly availed the abatement benefit in this case and negatived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal answered the second issue as under : "But in the instant case this is not the position. No penalty as observed above has been imposed under sub-rule (3) of Rule 96ZP under which differential duty had been demanded from the appellants. Rather penalty has been imposed under another sub-rule i.e. 1(A) of Rule 96ZP under which no duty had been demanded from the appellants." 8. It means, question of valuation of the goods does not arise, only law points (legal interpretations) are involved in this appeal. Moreover, the present appeal was admitted to decide the following substantial question of law :- "Board's Circulars being administrative circulars, whether such circulars could take precedence over the Notification and Show Cause Notices issued by virtue of Notifications, rendering the Show Cause Notices invalid if not issued as per Board's Circular." 9. Thus, it would be seen that pure substantial questions of law are involved in this appeal. Since the pure question of law (legal interpretations) are involved, so question of determination of the value of the goods for the purpose of assessment did not arise at all. Therefore, the appeal is very much maintainable under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scue of the assessee in this respect, in view of the law laid down by the Hon'ble Supreme Court in Pahwa Chemicals Pvt. Ltd.'s case (supra). Having interpreted the relevant provisions, it was ruled in para Nos. 12, 13 and 14 as under :- "12. As noted above, the Legislature has purposely omitted the word "Collector" from the proviso to Section 11A and replaced it with the words "Central Excise Officer". It is the Act which confers jurisdiction on the concerned Officer/s. The Act permits Central Excise Officer to issue the show cause notices even in cases where there are allegations of fraud, collusion, willful misstatement and suppression of facts. The question therefore is : Can the Board override the provisions of the Act by issuing directions in the manner in which it is done and if the Board cannot do so then what is the effect of such circulars? 13. In order to consider the powers of the Board one needs to see certain provision of the Act. Section 2(b) defines the "Central Excise Officer" and it is mentioned therein that any Officer of the Central Excise Department or any person who has been invested by the Board with any of the powers of the Central Excise Officer would be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e no infirmity in the judgment dated 25th June, 2003. We hold that the Superintendent had jurisdiction to issue show cause notice and the Deputy Commissioner had jurisdiction to adjudicate." 15. Meaning thereby, it has been authoritatively held by the Hon'ble Supreme Court that the Superintendent had jurisdiction to issue show cause notice and the Deputy Commissioner had jurisdiction to adjudicate the matter. Therefore, in view of the pronouncement of the Hon'ble and Apex Court, it is held that there is no legal infirmity in issuing show cause notices by the Superintendent to the assessee in the present case as well. Hence, the contrary findings recorded by the Tribunal deserve to be and are hereby reversed. 16. As regards the question of determination of non-payment of duty and on that account the imposition of penalty is concerned, again, it is not a matter of dispute that the assessee did not pay the entire amount of duty. The explanation put forth by the assessee, with regard to short payment, was that since there was conflict between the Act and the Rules, the benefit granted under any provisions of the Act cannot be taken away by the Rules and, therefore, the short payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have inbuilt concept of discretion, has been rejected. Hon'ble the Supreme Court has specifically overruled the judgment rendered in Dilip N. Shroff v. Joint Commissioner of Income Tax, 2007 (219) E.L.T. 15. In that case it was held that an element of mens rea was necessary before penalty could be imposed. However, in Dharamendra Textiles case (supra), the aforesaid view has been overruled on the ground that it has failed to take into account the provisions of Section 271(1)(c) of the Income Tax Act, 1961. It has been laid down that the aforesaid provision was rightly interpreted in the case of Chairman, SEBI v. Shriram Mutual Fund, 2006 (5) SCC 361. Accordingly, in the concluding part. Hon'ble the Supreme Court in Dharamendra Textile's case (supra) has held as under : - "Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroffs case (supra) was not correctly decided but Chairman, SEBI's case (supra) has analysed the legal position in the correct perspectives. The reference is answered.........." "The judgment in Rajasthan Spinning and Weaving Mill's case (supra) has not deviated from the aforesaid view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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