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TMI Blog2012 (10) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... e person and he shall get option of the said beneficiary scheme even on payment within 30 days of subsequent communication, with proper quantification and particular amount of duty and interest - benefit of provisions of sub-Section (1A) and two provisos of sub-section (2) of Section 11A of the Central Excise Act, 1944 to extended to the assessee – in favor of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... ith interest and penalty equal to 25% of the duty specified in the notice or duty so accepted by the said person within 30 days, the proceedings in respect of such person or other persons to whom the notices are served under sub-section 11A(1), shall be deemed to be conclusive as to the matters in the show cause notice. It is his submission that the appellants are ready to discharge the entire duty liability as indicated in Para 10.6 of the impugned order along with interest, which has to be communicated by the adjudicating authority on the said amount of duty and 25% of the duty as penalty, within 30 days of this Tribunal's directions. For this proposition, he would rely upon the decision of the Hon'ble Gujarat High Court in the case of Bhagyodaya Silk Industries - 2010 (262) E.L.T. 248 and more specifically, Para 10 of the said judgment. He would also rely upon the judgment of the Hon'ble Gujarat High Court decision in the case of Sidhivinayak Dyg. & Ptg. Mills - 2011 (265) E.L.T. A-69 (Guj.). 4. Learned SDR on the other hand would submit that the provisions of statute are framed by the Parliament and are available to all assessees equally; The provisions of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellate authority. Hence the appellant should not be allowed to raise this plea at this stage. 5. We have considered the submissions at length made by both sides and perused the record. 6. Undisputed facts are that appellant M/s. SCPL has admitted to the fact that there was clandestine removal of goods during the period June to September 2006. It is also admitted that the appellant is ready to discharge the duty liability which would be quantified in accordance with the findings of the learned Commissioner as per Paragraph 10.6. The appellant is mainly arguing on the legal proposition, the availability of benefit of provisions of sub-section (1A) and two provisos of sub-section (2) of Section 11A of the Central Excise Act, 1944. 7. At the outset, we may first hold that submission made by the learned SDR that the appellant had not raised this legal point before the adjudicating authority or before the first appellate authority and hence they should not raise the same before the Tribunal, is an incorrect proposition, as this is a question of law i.e. benefit of provisions of law as it stands in the statute on the date of appeal before us. This, being a substantial q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made there under with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under section 11AB and penalty equal to twenty-five per cent of the duty specified in the notice or the duty so accepted by such person within thirty days of the receipt of the notice.] (2) ............................. [Provided that if such person has paid the duty in full together with, interest and penalty under sub-section (1A), the proceedings in respect of such person and other persons to whom notice is served under sub-section (1) shall, without prejudice to the provisions of sections 9, 9A and 9AA, be deemed to be conclusive as to the matters stated therein :" Section 11AB.............................. Section 11AC............................. [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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer shall determine the amount of duty or interest not being in, excess of the amount partly due from such person. 14. It is also noticed that on 26-7-2006 the C.B.E. & C. had issued a Circular No. 831/8/2006-CX, clarifying the intention of dispensing with the rigours of adjudication procedure, behind enacting this optional scheme is to settle the dispute at an early stage to reduce the litigation and also to speed up the collection of dues more expeditiously. It is observed that the legislative intent behind such optional scheme would be defeated by not explicitly stating this option to the assessee in the notice issued under the provisos to sub-section (1A) of Section 11A of the Central Excise Act, 1944/Section 28 of the Customs Act, 1962. 15. In the case of similar default, in not explicitly stating in the "Adjudication Order", the option available at that stage to the person under Section 11AC of the Act, the Hon'ble High Court of Delhi in its judgment in the case of K.P. Pouches v. UOI - 2008 (228) E.L.T. 31 (Del.) held that failure of the person to pay reduced penalty amount, within 30 days of the adjudication order, cannot be held against him, and directed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailability of benefit of reduced penalty prescribed under proviso to Section 11AC of the Central Excise Act, 1944 and to give option to such person liable for penalty under Section 11AC of the Central Excise Act, 1944? (d) Whether in the facts and circumstances of the case, the Tribunal is justified and has committed substantial error of law in placing reliance on the decision rendered by the Hon'ble High Court in the case of C.C.E. v. Malbro Appliances P. Ltd., reported in 2007 (79) RLT 109 (Del) = 2007 (208) E.L.T. 503 (Delhi) - 2007 (5) S.T.R. 256 (Del.) and in case of K.P. Pouches P. Ltd., reported in 2008 (85) RLT 483 (Delhi) - 2008 (228) E.L.T. 31 (Del.)? (e) Whether the impugned order made by the Tribunal can be said to be an order in accordance with law? (f) Whether or not in the facts and circumstances of the case the Tribunal has committed substantial error of law in reducing penalty to 25% of the duty amount on the respondent ?" After considering the submissions made by both sides before the Hon'ble Court, their Lordhsips, while answering the question of law, has held as under :- "10. ................... ...................It is also important to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efit of reduced penalty and pay the same within 30 days of last communication. The Hon'ble High Court held that it is too much to expect from the assessee to pay interest along with duty in the absence of clear calculation of interest. On the same analogy, the notice issued under sub-section (1) of Section 11A of Central Excise Act, 1944/Section 28 of Customs Act, 1962, shall explicitly state that proper quantification of particular amount of duty and interest, the option available to the person under the aforesaid optional scheme for dispensing with the rigours of adjudication procedure, under sub Section (1A) and two provisos of sub-section (2) of Section 11A of Central Excise Act, 1944/Section 28 of Customs Act, 1962. Once the option is made known to the person by explicitly stating in the notice and the person still does not take advantage of the scheme, it would be entirely to his own peril. But if the option is explicitly not stated in the notice with proper quantification of particular amount of duty and interest, the failure on the part of person to pay duty, interest and penalty amount equivalent to 25% of duty, within 30 days of the notice, under Section 11A of the Centr ..... 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