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TMI Blog2013 (7) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... goods, liable for confiscation in the manner mentioned in Rule 26 (1) of the Central Excise Rules, 2002 and for this reason have been Show Caused for imposition of penalty under this Rule, either in the notice under section 11A (1) issued to the person chargeable with duty or by separate notices issued in this regard - as when the proceedings against the manufacturer/assessee stand concluded on payment of disputed amount of duty plus interest plus 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition of penalty under Rule 26 against other persons like traders who had purchased the goods, transporters who had transported the goods cleared by manufacturer/assessee, the Directors/employees of the manufacturer/assessee company. Observation made by the Hon’ble Tribunal:- Under Section 32M, every order of settlement passed under section 32F(5) shall be "conclusive as to the matters stated therein" and no matter covered by said order shall, save as otherwise provided in this chapter, can be reopened in any proceedings under this Act or under any other law for the time being in force - Tribunal in case of Shitala Prasad Sharma Vs. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vide order dt.20.04.2009, confirmed the above mentioned demand along with interest and imposed penalty of equal amount on M/s. Agrawal Sponge Ltd. under Section 11AC and appropriated the amount of duty, interest and 25% penalty already paid towards the demand of duty, interest and penalty imposed. But in the same order he dropped the proceedings against Sh. Deepak Agrawal, Sh. Harikrishna Madanlal Agrawal and M/s. Abir Steel Rolling Mills Pvt. Ltd. for imposition of penalty under Rule 26 of Central Excise Rules, 2002, in view of the provisions of Sub Section (1A) (2) of Section 11A. 1.3 The Department filed Review appeals before the Commissioner (Appeals) against dropping of the penal proceedings under Rule 26 against Sh. Deepak Agrawal, Sh. Harikrishna Madanlal Agrawal and M/s. Abir Steel Rolling Mills Pvt. Ltd. The Commissioner (Appeals) vide order dtd.13.01.2010, after considering the provisions of Sub-Section (1A) (2) of Section 11A, dismissed the Revenue's Appeals. Against this order of the Commissioner (Appeals), these three appeals has been filed by the Revenue. 2. Heard both the sides. 3. Ms. Shweta Bector, Ld. Departmental Representative, assailed the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of disputed amount of duty along with interest and 25% of the duty towards penalty by M/s. Agrawal Sponge Ltd., the person liable to pay the duty, within the period prescribed in sub Section (1A), would not result in the proceedings against the Respondents for imposition of penalty under Rule 26, coming to an end. 5. Sub-Section (1), (1A) (2) of Section 11A are reproduced below. "SECTION 11A Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded-(1) When any duty of excise has not been levied or paid or had 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 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 which has been short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly due from such person.]" 5.1 From perusal of above provisions, it will be seen that when there is any non-levy, non-payment or short levy or short payment of duty or erroneous refund of duty, in terms of provisions of Sub Section (1) of 11A, notice for recovery of duty is to be issued to the "person chargeable with duty which has not been levied or paid or which has been short levied or short paid or to whom erroneous refund has been made". When such short levy or non-levy, short payment and non-payment or erroneous refund of duty is on account of any fraud, collusion or willful mis-statement or suppression of facts or contravention of the provisions of Central Excise Act or of the Rules made there under with the intent to evade the duty by the person chargeable with duty or the persons who has received erroneous refund, this person, in accordance with the provisions of Section 11AC, in addition to the duty demand from him which may be determined under section (2) to Section 11A, also faces penalty equal to the duty demand determined under Section 11A (2). Sub-Section (1A) gives an option to the above mentioned person i.e. the person chargeable with duty which has not been levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im, also show causes other persons (co-noticees) like Directors or employees of the manufacturer/assessee company or other persons like Transporters or Customers who have dealt with the goods in respect of which either the duty liability had not been discharged or has been discharged only partly, for imposition of penalty under section 26 of the Central Excise Rules, whether the Show Cause Notice would also stand concluded in respect of the co-noticees as to the matter stated therein, when the manufacturer/assessee has paid the duty along with interest and 25% of duty on penalty within 30 days of the receipt of the Show Cause Notice. 6. The first provisos to Sub-Section (2) use the words "proceedings in respect of such person and other persons to whom notice are served under Sub-Section (1)". The word "such person" is obviously the person referred to in Sub-Section(1) as "person chargeable with the duty which has not been levied or paid or which had been short levied or short paid or to whom refund has erroneous been made" i.e. the person who is liable to pay the duty. The question arises as to which persons are covered by the words "other persons". Though the Appellant have cite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d would amount to adopting a construction of the 1st proviso to Section 11A (2), which would make the words "other persons" redundant, which is not permissible. 6.1 In my view, therefore, the words "other persons" used in first proviso to Sub-Section (2) would cover the co-noticees/persons who face the allegations of contravention of Central Excise Rules, which are linked with the allegation of deliberate/fraudulent short payment, non-payment or erroneous refund of duty against the person chargeable with duty facing the duty demand i.e. the person who are alleged to have knowingly dealt with the excisable goods, liable for confiscation in the manner mentioned in Rule 26 (1) of the Central Excise Rules, 2002 and for this reason have been Show Caused for imposition of penalty under this Rule, either in the notice under section 11A (1) issued to the person chargeable with duty or by separate notices issued in this regard. This interpretation would make sense, as when the proceedings against the manufacturer/assessee stand concluded on payment of disputed amount of duty plus interest plus 25% of the duty as penalty, there would be no sense in continuing the proceedings for imposition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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