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TMI Blog2013 (2) TMI 569X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion used in the said proviso is only in respect of such persons and not all the notices. Notices under sub-section 1 of section 11A are served only to those persons who are required to pay duty and have either not paid duty or short paid. The invocation of penal provision of Rule 26 is dependent upon so many factors which are unconnected with the provisions of section 11A. Rule 26 which provides for imposition of penalty in certain circumstances cannot be said to be a part of the proviso to sub-section 2 of section 11A so as to conclude the proceedings in respect of all notice on payment of duty, interest and part penalty by main manufacturer.The said proviso in my views, only concludes the proceedings in respect of the persons against whom notice under section 11A is issued and who have deposited the duty in terms of provisions of sub-section 1A of section 11A. - payment of short paid and non-paid duty by the main manufacturer would not result in conclusion of proceedings against all other persons on whom penalty stands proposed to be imposed in terms of Rule 26. If the legislative intent was extending immunity to all connected persons, the language used would have been simpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded that on compliance of requirement of payment of dues as above, it is not only the person from whom duty is demanded but other persons also are entitled to have benefit of deeming fiction of conclusion of proceedings in the notice. For the above conclusion, Commissioner (Appeals) has relied upon Board's Circular No.831/08/2006-CX, dtd. 26.07.06. 2. Revenue is in appeal against the above order on the ground that payment of duty along with interest and 25% of penalty results in conclusion of proceedings as far as the provisions of sections 11A read with section 11AC are concerned. In as much as the penalty was imposed on the respondents under Rule 26 of Central Excise Rules, 2002 which is an independent rule, the benefit in terms of 1st proviso to section 11A(2) is not available to the respondents. It is their contention that Rule 26 operates in a different scenario where a person acquires, transports, removes, deposits, keep, conceal, sell or purchase or deal with any manner with any excisable goods which he knows or has reasons to believe that they are liable to confiscation under the concerned Act. The said rule is independent of section 11A of the Central Excise Act where se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the receipt of the notice.] (2) The [Central Excise Officer] shall after considering the representation, if any, made by the person on whom notice is served under sub-section (1) determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. [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 are served under sub-section (1) shall, without prejudice to the provisions of section 9, 9A and 9AA, be deemed to be conclusive as to the mattes stated therein : Provided further that if such person has paid duty in part, interest and penalty under sub-section (1A), the Central Excise Officers, shall determine the amount of duty or interest not being in excess of the amount partly due from such person.]" 4. Sub-section 1 of section 11 provides for issuance of show cause notice demanding short paid or non-paid duty within the period of either one year from the relevant date or five years where there is misstatement of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t refer to all other persons, but the same qualifies the other persons to whom notices are served under sub-section 1. As such the reference to other persons in the said proviso is not to all other persons to whom notices are served for imposition of penalty under law but are restricted to other persons to whom notices are served under sub-section 1 of section 11A. As already observed, notices under sub-section 1 of section 11A are served only to those persons who are required to pay duty and have either not paid duty or short paid. Notices under sub-section 1 are not to be issued to other persons who may be employees of the manufacturing unit. As such analyzing the proviso to sub-section 2 of section 11A, it becomes clear that the proceedings are deemed to be conclusive only in respect of such person who discharges his duty liability in terms of sub-section 1A or to whom notices stands served under sub-section 1. 7. Referring to the provisions of Rule 26 of Central Excise Rules, 2002, it is seen that the same prescribes for imposition of penalty in certain circumstances. For better appreciation, the said rule is re-produced below :- "RULE 26. Penalty for certain offences. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... litigation and also aid in collection of tax dues more expeditiously. The scheme is optional and not compulsory. The assessee has the further option of using the proposal facility in full or in part. In case of part payment, the remaining amount will be subject to regular proceedings as per the law." 10. A reading of the above circular nowhere clarifies the issue as to whether payment by the main manufacturer would result in stopping of proceedings in respect of all the persons or the same would amount to settle the dispute viz-a-viz the main manufacturer only. As such nothing turns on the said Circular. 11. In view of the foregoing discussions, I am of the view that Commissioner(Appeals)'s orders allowing the appeals of respondents by extending the benefit of proviso to sub-section 2 of section 11A are not in accordance with law. However, in as much as the appellate authority has not discussed the merits of the case in each and every case, the impugned orders are set aside and matter remanded for fresh decision after independently examining the role of each and every respondents and the applicability of Rule 26. Revenue's appeals are allowed in above terms. (Pronounced in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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