9911796707
TMI Blog2006 (10) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... aside the order passed by the Tribunal to the extent and penalty levied on the assessee have been set aside because the duty was deposited before issue of show cause notice and remand the case back to the Tribunal for fresh decision on merits and in accordance with law. Parties are directed to appear before the Tribunal for further proceedings on 4-9-06 . 2. We have perused the records and heard both sides. The only issue for consideration is whether penalty is attracted in the present case under Section 11AC of the Central Excise Act. That section also may be read : Section 11AC. Penalty for short levy or non-levy of duty in certain cases. - Where any duty of excise has not been levied or paid or has been short-levied or short-paid or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation. - For the removal of doubts, it is hereby declared that- (1) the provisions of the section shall also apply to cases in which the order determining the duty under sub-section (2) of Section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the President; (2) any amount paid to the credit of the Central Government prior to the date of communication of the order referred to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he paper was described of Thabha . The fact of taking Modvat credit on the entire quantity of paper received and the sale of Thabha on payment of duty were disclosed in the statutory records as well as in the returns filed on a monthly basis. During the period 28-11-97 to 31-3-02, the total credit attributable to waste paper worked out to Rs. 9,70,297/-. 5. Central Excise authorities took the view that the appellant was not entitled to take credit on the quantities of damaged paper. Thereupon the appellant deposited the amount of Rs. 6,07,164/-. Subsequently, Rs. 3,63,133/- was also deposited. The matter did not end there. A SCN dt. 21-8-02 was issued to the appellant alleging that it had violated Modvat rules in relation to the damaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aba in the accounts has been accepted even in the impugned order. The main point held against the appellant by the lower authorities is that it was claiming excise duty also from insurance in regard to the damaged paper and this was not disclosed to revenue. The submission of the ld. Counsel on this is that there is nothing illegal or extraordinary in including duty paid in the insurance claims and there was no requirement to declare insurane claims to excise authorities. 7. Ld. DR would emphasis that having claimed the excise duty on the damaged paper through insurance, the appellants should have disclosed this aspect to the Central Excise authorities and failure to do the same is suppression of facts with intent to evade payment of duty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statutory requirement to disclose insurance claims to excise. There is also no legal provision that insurance claim cannot include the tax paid on the damaged or lost goods. A charge of fraud or suppression would have had some force if the appellant had not paid duty on the damaged paper. Data on record also shows that the duty paid by the appellant on the damaged paper was almost 2/3rd of the credit taken on those goods. In these circumstances, we are of the view that the appellant s contention that the ingredients of Section 11AC are not present in this case and short levy of duty is not the result of any fraud or suppression of facts with intent to evade payment of duty merits acceptance. Accordingly, Section 11AC was not attracted. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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