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TMI Blog2012 (9) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner of Customs, Excise and Service Tax (Appeals-I) in Order-in-Appeal No. 24/2007 (H-I) CE. 2. The respondent is a manufacturer of HR tubes/pipes falling under Chapter Heading No. 7306.90 of the Central Excise Tariff Act, 1985. Apart from factory gate sales, the respondent is clearing the finished goods to consignment agents also on payment of duty. Based on intelligence gathered that the respondent is selling its goods through consignment agents, who are adopting values higher than the values on which duty was being paid at the factory gate. Officers of Central Excise, Anti-evasion Division, Hyderabad-I Commissionerate, visited the unit as well as its registered office on 26-2-2003 and verified the stocks of inputs and finished pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent assessee denied any suppression or intent to evade the duty. 3. The Commissioner of Customs & Central Excise, however, in the order dated 22-5-2007, demanded differential duty of Rs. 4,29,441/- payable by the respondent-assessee; ordered appropriation of Rs. 1,70,000/- paid by the assessee under protest; ordered payment of interest at the appropriate rate, on the duty demanded under Section 11AB of the Act; and imposed a penalty of Rs. 1,00,000/- on the respondent under Rule 25 of the Rules. 4. Aggrieved thereby, the respondent-assessee preferred an appeal to the Commissioner of Customs & Central Excise (Appeals-I), which was allowed by the order dated 9-7-2007. The Appellate Authority, relying on the judgment of the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... & Central Excise. 6. Rule 25 of the Central Excise Rules, 2002, opens with the words "subject to the provisions of Section 11AC of the Act". Section 11AC of the Act enjoins levy of penalty for short-levy or non-levy of duty in certain cases and provides that 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 wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of Section 11AC of the Act shall also be liable to pay a penalty equal to the duty so det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to in clauses (a) to (d) therein. Rule 25 opens with the words, "subject to the provisions of Section 11AC of the Act". Thus, for the purpose of invoking the said Rule, the requirements of Section 11AC of the Act are required to be satisfied, namely that the default should be occasioned by reason of fraud, collusion or any wilful misstatement or suppression of facts, or the contravention of any of the provisions of the Act or Rules should be with the intent to evade payment of duty. Unless, the said basic ingredients are satisfied, the question of invoking either Section 11AC of the Act or Rule 25 of the Rules would not arise. In the circumstances, in the absence of any such finding having been recorded by the adjudicating authority, the q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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