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TMI Blog2009 (10) TMI 771X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority or the Tribunal to reduce the penal amount except in the circumstances contemplated by various provisos to Section 11AC of the Act. Having answered the aforesaid question in favour of the Revenue, the other question whether Section 11AC of the Act is attracted to the facts of the present case has to be answered against the Revenue and in favour of the dealer. - C.E.A. No. 47 of 2007 - - - Dated:- 5-10-2009 - M.M. Kumar and Jaswant Singh, JJ. Shri Gurpreet Singh, SCC, GOI (Indirect Taxes), for the Appellant. None, for the Respondent. ORDER The instant appeal was disposed of on 14-9-2007 with the observation that if the amount of duty has been deposited before issuance of show cause notice to the dealer-respondent then no penalty under Section 11AC of the Central Excise Act, 1944 (for brevity the Act ) was imposable. The Division Bench did not admit the appeal and proceeded to dismiss the same on the basis of the aforesaid principle settled in various judgments as is evident from the following para : After hearing learned counsel for the appellant and perusing the record we find that the matter is not res integra in as much as, we have already decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Rule 74 of the Cenvat Credit Rules, 2004 (for brevity the 2004 Rules ) a show cause notice was issued to the dealer with a proposal for imposition of penalty under Rule 25 of the Central Excise Rules, 2002 (for brevity the Rules ) read with Rule 15 of the 2004 Rules and Section 11AC of the Act. A separate show cause notice was issued to Shri Sanjeev Kumar, the Director of the unit for imposition of personal penalty on him under Rule 26 of the Rules read with Section 11AC of the Act. The matter was decided against the dealer vide order-in-original dated 30-11-2005. As a consequence the demand of Rs. 55,8211- was confirmed under Section 11A of the Act. The dealer had deposited the amount which stood appropriated to the revenue. However, an equal amount of penalty was imposed under Section 11AC of the Act read with Rule 25 of the Rules and Rule 15 of the 2004 Rules. A sum of Rs. 10,000/- as personal penalty was also imposed (P.1). 4. The dealer filed an appeal urging various grounds. The appellate authority by placing reliance on a judgment of the Tribunal rendered in the case of Rashtriya Ispat Nigam Ltd v. CCE - 2003 (161) E.L.T. 285 (Tri.) which is claimed to be upheld by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very case of non payment/short payment of duty. It follows that the judgment in Dharmendra Textile Processors s case (supra) is not an authority that irrespective of the fulfillment of basic ingredients of Section 11AC of the Act the penalty get attracted for non payment or short payment of duty. In paras 18 and 19 of the judgment in Rajasthjan Spinning and Weaving Mills case (supra), it has been observed as under : 18. One can not fail to notice that both the proviso to sub-section (1) of Section 11A and Section 11AC use the same expressions: ....by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made there under with intent to evade payment of duty,... . In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of deception the main provision of sub-section (2B) will have no application. 9. It is thus obvious that there is no rule of law applicable in blanket manner to the effect that if the amount of duty due has been paid before the issuance of show cause notice then the provision concerning interest or penalty would not be applicable. It has been clarified by the Explanations-I and II that non payment of duty amount would be subject to imposition of interest under Section 11AB of the Act and in case the non payment of duty/short payment of duty is found to be intentional actuated by the reason of deception then sub-section (2B) of Section 11 of the Act would have no application. 10. The aforesaid principles are required to be applied to the facts of the present case. The finding recorded by the Assessing Authority in the order-in-original no where states that there was any suppression of facts or mis-statement or fraud with an intention to evade payment of duty. On the contrary the defence of the dealer has been noticed which stated that clandestine removal of 7.601 MT. of PVC pipes could not be proved by the revenue although the shortage was conceded. Even for shortage stated in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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