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TMI Blog2013 (7) TMI 827X X X X Extracts X X X X X X X X Extracts X X X X ..... nd also to other noticees viz. Shri Kirti Jethalal Doshi, Broker, M/s. Kirti J. Doshi, Shri Chintan K. Shah, Accountant-cum-Partner, M/s. Kirti J. Doshi, for demand of central excise duty of Rs.9,30,417/- from M/s. Balaji Loha Pvt. Ltd. along with interest and imposition of penalty on them under Section 11 AC and also for imposition of penalty on Shri Jay Prakash Agarwal, General Manager and Authorized Signatory, Shri Kirti Jethalal Doshi, Broker and Shri Chintan K. Shah, Accountant-cum-Partner of M/s. Kirti J. Doshi under Rule 26 of the Central Excise Rules. 1.1. However, M/s. Balaji Loha Pvt. Ltd. had paid the disputed amount of duty as mentioned in the show cause notice along with interest and 25% of the duty amount as penalty within 30 days of the show cause notice as per the provision of Section 11A(1A). The show cause notice was adjudicated by the Addl. Commissioner vide order-in-original dated 11.02.2009 vide which the duty demand was confirmed along with interest and penalty of 25% of the duty amount already paid was also confirmed. However the Penal proceedings against other noticees were dropped in view of Section 11A (1A) read with proviso to Section 11A(2). The departm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of M/s. Balaji Loha Pvt. Ltd. against whom the shows cause notice had been issued for demand of duty and imposition of penalty under Rule 26 Central Excise Rules. There is no dispute that M/s. Balaji Loha Pvt. Ltd. have paid the duty of Rs.9,30,417/- along with interest and 25% of the duty amount as penalty within 30 days of receipt of the show cause notice and as such they have complied with the provisions of sub-section (1A) of Section 11A and there is no dispute that the proceedings against them stand concluded. The point of dispute is as to whether the proceedings would also stand concluded against the appellant who is a co-noticees ought to be penalized under Rule 26 of the Central Excise Rules, 2002. 7. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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.] 7.1 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ute 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 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. 8. The first proviso 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions 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. 8.1 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 wit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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