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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 ..... Ltd. under proviso to Section 11A(1) of Central Excise Act in respect of 49.885 MT of M.S. Ingots alleged to have been cleared without payment of duty and also for imposition of penalty on M/s. Agrawal Sponge Ltd. under Section 11AC and the imposition of penalty under Rule 26 of Central Excise Rules, 2002 on Sh. Deepak Agrawal, Director of the M/s. Agrawal Sponge Ltd., Sh. Harikrishna Madanlal Agrawal (broker) and M/s. Abir Steel Rolling Mills Pvt. Ltd. (buyer). 1.2 M/s. Agrawal Sponge Ltd. had paid the entire disputed amount of duty along with interest and 25% of the duty towards penalty within 30 days of the issue of the Show Cause Notice, in term of the provisions of Sub-Section (1A) of Section 11A of the Central Excise Act. However, jurisdictional Assistant Commissioner still adjudicated the Show Cause Notice 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wal, a broker and M/s. Abir Steel Rolling Mills Pvt. Ltd., a buyer. There is no dispute that the main Noticee M/s. Agrawal Sponge Ltd. have paid the disputed amount of duty along with interest and 25% of duty as penalty within 30 days of receipt of Show Cause Notice in accordance with the provisions of Sub-Section (1A) of Section 11A. This fact has been accepted by the Assistant Commissioner and in view of this only he has dropped the penal proceedings under Rule 26 against the co-noticee Sh. Deepak Agrawal, Sh. Harikrishna Madanlal Agrawal and M/s. Abir Steel Rolling Mills Pvt. Ltd. by treating the Show Cause Notice as conclusive as to the matter stated therein, in view of the provision of Sub-Section (1A) read with provision to Sub-Section (2) of Section 11A. However, the Department's plea is that deposit 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 bel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring 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 matter 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.]" 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Adjudication, is equivalent to the benefit available to him under first and second proviso to Section 11AC, which is available after conclusion of Adjudication proceedings and for which the he is required to pay duty demand confirmed along with interest and 25% of duty as penalty within 30 days from the date of communication of the Adjudication Order. Thus Sub-Section (1A) read with Sub-Section (2) of Section 11A can be treated as an additional facility given to a manufacturer/assessee to settle his tax dispute immediately after issue of the Show Cause Notice and thereby reduce the litigation involving Adjudication and appeals, besides aiding, in collection of tax dues expeditiously. The point of dispute is as to when the Show Cause Notice issued to the manufacturer/assessee for demand of duty along with interest and imposition of penalty under Section 11AC on him, 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 pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s "such person" in first proviso of Sub-Section (2) would include more than one person also if Show Cause Notice under Sub-Section (1) has been issued for recovery of duty to more than one person. Therefore the words "other persons" in first proviso to Sub-Section (2) have to be given a meaning different from the words "such persons". Revenue's contention would have been correct if the words "other person" were not there in 1st proviso to Section 11A(2) and in that case, there would have been no scope for doubt that on compliance with the provisions of Section (1A), only the proceedings against the person chargeable with duty would stand concluded. But since the legislature has used the words "such person and other persons" in 1st proviso to Section 11A(2), the words "other persons" have to be given a meaning, different from "such person". Adopting the Revenue's stand 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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