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TMI Blog2014 (5) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... pression of facts, or contravention of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty shall also be liable to pay penalty equal to the duty so determined. The assessee is also liable to pay interest for the period in question. When the assessee is having the benefit of payment of penalty at 25% of the duty determined, in case the duty is paid within a period of thirty days after the issuance of show cause notice, it is beyond logic as to why they should not be given the indulgence to pay penalty at 25%. The prompt payment of duty after pointing out suppression and before issuance of show cause notice cannot be taken as a negative factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arch, 1995. Further verification revealed that duty has not been paid on the manufacture of tools. When this defect was pointed out, the assessee paid the duty. The Original Authority thereafter issued a show cause notice and ultimately, the assessee was directed to pay interest and penalty. The said order was challenged before the Commissioner (Appeals). The Appellate Authority by following the earlier order held that levy of penalty is legally bad on account of the payment of duty before issuance of show cause notice. The said order dated 12th February, 2004 was challenged before the CESTAT. 4. The CESTAT opined that when the differential duty had already been deposited before issuance of show cause notice, there is no case for imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. The core issue is whether the assessee would be absolved from the liability to pay interest and penalty in view of their payment of differential duty before the issuance of show cause notice. 11. Section 11AB deals with interest on delayed payment of duty. Similarly Section 11AC deals with penalty for short-levy or non-levy of duty in certain cases. Both these provisions indicate that in case the duty has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India v. Dharamendra Textile Processors, [2008 (231) E.L.T. 3], observed that though the application of Section 11AC would depend upon existence or otherwise of the conditions expressly stated in the Section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. 16. In view of the judgment of the Supreme Court in Rajasthan Spinning and Weaving Mills, the assessee was not justified in their contention that payment of differential duty before issuance of show cause notice would put an end to the penalty proceedings initiated against them. Therefore, the said finding is liable to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thin thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under the Section would be twenty-five per cent of the duty so determined. 20. When the assessee is having the benefit of payment of penalty at 25% of the duty determined, in case the duty is paid within a period of thirty days after the issuance of show cause notice, it is beyond logic as to why they should not be given the indulgence to pay penalty at 25%. The prompt payment of duty after pointing out suppression and before issuance of show cause notice cannot be taken as a negative factor against the assessee to claim penalty at 100%. In case the penalty is paid even b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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