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TMI Blog2010 (2) TMI 1016X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee started declaring production and clearance of Repeaters in the periodical returns paid appropriate duty. In the month of Dec., 2006, the assessee had paid Rs. 1,02,67,096/- Central Excise Duty; Rs. 57,348/- Edn. Cess along with an interest of Rs. 38,49,927/- towards the duty liability on the Repeaters manufactured and cleared during the period June, 2002 to March, 2006 (production and clearance Nil during the months April, 2006 and May, 2006) and claimed in their letter dated 22-12-2006, that they had confusion and conflicting views about the process undertaken by them as to amounting to manufacture or not and hence did not declare in their periodical returns filed during the relevant period and also accepted they had suppressed the relevant facts from the Department. The amount of duty stated above was paid by the assessee after availing the cum duty benefit. The show cause notice was issued demanding duty with interest on the full value of clearance under Sections 11A and interest under 11AB and proposed levy of penalty under Section 11AC of the Central Excise Act, 1944 and Rule 25 of the Central Excise Rules, 2002. 2.1 The said show cause notice was contested by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multi-user environment, the Repeaters come into play; that the Repeater is a metallic housing, wherein wherein, two GSM radios are placed inside and are connected through an interface kit; that the two radios are placed inside the housing are kept in alternate mode i.e., one radio in RX mode and the other one in TX mode; that the metallic housing is connected to other accessories such as power supply and a duplexer, where the power supply supplies power to the unit and the duplexer which is connected to the antenna through a feed line assists the Repeater to operate in full duplex mode; and that the Repeater is useful in a closed user environment where more than two users are involved. Accordingly the assessee stated that the process undertaken by them in the manufacture of repeaters is mere assembly of various imported and locally procured items : The assessees further submitted that initially they felt that their activities would amount to manufacture and thereby have registered themselves with the department and started paying duty during the period Feb., 2001 to May, 2002 and thereafter based on certain opinion taken from consultants, they decided that their activity does no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cided by the following decisions :- (1) Dhananiwala Textiles (P) Ltd. [2006 (199) E.L.T. 850] (2) Aurobindo Pharma Ltd. [2008 (223) E.L.T. 196] (3) German Remedies Ltd. [2004 (177) E.L.T. 539] (4) Varalakshmi Plastics [2003 (158) E.L.T. 611] He would submit that the decision of the Hon ble High Court of Punjab and Haryana in the case of CCE, Rohtak v. J.R. Fabrics, 2009 (238) E.L.T. 209 (P H) will cover the issue in favour of the assessee inasmuch as that the amount of duty already paid before the issuance of show cause notice; the penalty imposable will be only 25% of the duty payable. 4. Learned SDR on the other hand would contest the claims of the appellant before us. It is her submission that the appellant herein were discharging the duty on the Repeaters prior to June, 2002. It is her submission that having obtained a opinion from some consultant on 4-6-2002 they should have approached the department to verify whether the said opinion could be correct or otherwise. It is her submission that having not done so, they did not show manufacture and clearances of the said Repeaters in the monthly returns. It is her submission that the monthly returns wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinue the same on an opinion given by the consultant, it was for the assessee to approach the department and seek clarification on the issue. After seeking clarification, any action could have been taken by the assessee. In this case, we find that the appellant/assessee has suo motu decided not to discharge duty liability and not followed the law which is required to be followed by him as a central excise registered unit. In view of this, we hold that the duty liability fastened upon them by the adjudicating authority is correct and that portion of the order does not require any interference. Consequently, the interest liability which has been fastened upon them is also liable to be upheld and we do so. 7. As regards penalty we find that the main contention of the appellant is that having discharged duty liability before the issuance of show cause notice on their own, they should get the benefit of provisions of Section 11A(2B) of the CE Act, 1944. We find that the Section 11A(2B) discusses about the discharge of duty liability by the assessee on his own. The said provisions of Section 11A(2B) are further qualified by an explanation, which indicates that the provisions would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l to the duty so determined : [Provided that where such duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty five per cent of the duty so determined : Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso : Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty, as reduced or increased, as the case may be shall be taken into account : Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeal), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situation where duty determined to be payable is reduced or increased by the Commissioner (Appeals), Appellate Tribunal or by this Court then duty as reduced or increased is required to be taken into account. The provision takes care of fluctuation in the assessment of duty at the appellate stage. However, in the present case there is no increase or decrease in the assessment of duty of excise. The alteration has been ordered by the Tribunal in the order of the Commissioner (Appeals) by reducing the amount of penalty to 25% of the total amount of duty of excise assessed by the Assessing Authority. Therefore, we are of the view that the appeal filed by the Revenue is liable to be rejected. 10. It is appropriate to notice that the period in question is 28-7-2001 to 28-2-2002 and there is no dispute that the proviso added by Act No. X of 2000 is made applicable w.e.f. 12-5-2000 would apply which provides that an amount equal to 25% of the amount of duty of excise would be liable to be paid as penalty if the amount of duty of excise is paid within thirty days from the date of communication of the order by the Central Excise Officer. 11. When we examine the facts of the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31. After reading Section 11AC of the Act, the Division Bench came to the conclusion that according to the proviso only 25% of the duty of excise was payable. The facts of the present case are akin to the facts of the Division Bench judgment in K.P. Pouches (P) Ltd. case (supra). It has been held by the Division Bench that when the statutory authorities are acting illegally and contrary to the 1st proviso to Section 11AC of the Act and therefore the assessee cannot be faulted to challenge the order passed by the Assistant Commissioner which fault was also repeated by the Commissioner (Appeals). The situation is the same in the present case. We, therefore, respectfully agreeing with the view taken by the Division Bench in K.P. Pouches (P) Ltd. s case (supra) hold that the conclusion reached by the Tribunal that the dealer-respondent was liable to pay penalty to the extent of 25% of the amount of duty of excise determined by the officer concerned. 15. The argument of the Revenue that the judgment in Dharamendra Textile Processor s case (supra) would apply and penalty equal to the amount of duty of excise assessed by the Assessing Authority is to be paid. We are afraid that such an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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