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TMI Blog2009 (8) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant. Shri N.A. Narayan, Advocate, for the Respondent. ORDER This appeal is directed against OIA No. 50/2006-C.E., dated 26-4-2006. 2. The relevant facts that arise for consideration are the respondent herein during the period 1-4-03 to 31-3-04 were charged with clandestine removal of the final products manufactured by them without intimating or filing the returns with the department. The respondent herein vide their letter dated 31-3-05 requested for dropping the proceedings as they have discharged the entire duty liability with interest. The said letter also requested the, authorities to close the issue without issuance of show cause notice. The adjudicating authority after conducting the proceedings without issuance of show cause notice confirmed the demand under proviso to Section 11A(1) and also charged interest on the duty which has escaped and appropriated the amount paid by the respondent. The adjudicating authority, did not impose any penalty under the provisions of Section 11AC of Central Excise Act, 1944 on the respondents but imposed a penalty of Rs. 15,000/- on the Director of the respondent company. Aggrieved by such an order, revenue preferred an appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. - (1) When any duty of excise has not been levied or paid or has been short levied or short-paid or (erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made there under), a Central Excise Officer may, within (one year) from the relevant date, serve notice on the person chargeable with the duty which has not been levied or paid or which has been short-levied or short-paid or to whom the refund has erroneously been, made, requiring him to show cause why he should not pay the amount specified in the notice; Provided that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act of the rules made there under with intent to evade payment of duty, by such person or his agent, the provisions of this sub-section shall have effect, (as if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid : Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of one year referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. - Nothing contained in this sub-section shall apply in case where the duty was not levied or was not paid or was short-levied or was short-paid or was erroneously refunded by reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty. Explanation 2. - For the removal of doubts it is hereby declared that the interest under Section 11AB shall be payable on the amount paid by the person under this sub-section and also on the amount of short-payment of duty, if any, as may be determined by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade payment of duty. This would mean that a person or assessee who has ascertained his duty liability which has be not levied or paid or short levied or short paid by him can discharge the same and Central Excise Officers need not issue a show cause notice, but the exclusion given by sub-section 2B has been restricted only to the act of an assessee which are not tainted by the reason of fraud, collusion or any wilful mis-statement etc. In short the explanation clearly contemplates for issuance of show cause notice, even if the amount is paid by the assessee at his own ascertainment under Section 11A(2B), if such duty liability arises due to the ingredients of fraud collusion etc. The provisions of Section 11AC for imposition of penalty reads as under :- 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 erroneously refunded by reasons of fraud, collusion or any willful mis-statement or suppression of fact or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there is no determination of duty under sub-section 2 of Section 11A by the authorities, if that be so, the non-issuance of the show cause notice by the lower authorities to the applicant the mandate provisions of Sub-section 2B of Section 11A is definitely vital to the case of the revenue for seeking to impose equal amount of penalty under Section 11AC of the C.E. Act, 1944. 7. We find that Hon ble Supreme Court in the case of Rajasthan Spinning and Weaving Mills Others as reported at 2009-TIOL-169-HC-Kar-CX = 2009 (238) E.L.T. 3 (S.C.) in paragraph 18 has laid down the law which reads as under :- One cannot fail to notice that Both the proviso to sub-section 1 of Section 11A and Section 11AC use the same expression : .......by reasons of fraud, collusion or any willful 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 res ..... X X X X Extracts X X X X X X X X Extracts X X X X
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