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TMI Blog2007 (8) TMI 252X X X X Extracts X X X X X X X X Extracts X X X X ..... sent of the lawyers, we have heard the appeal for final disposal and the substantial question of law involved can be drafted as follows: "Whether authorities under Central Excise Act, 1944, could have, in the facts and circumstances of the case, converted the penalty u/s. 11AC into penalty under Rule 173Q of Central Excise Rules, 1944, and reduce it to an amount lesser than 100% / 25% of duty evaded?" 2. On the basis of information received, the officers of preventive section of Aurangabad Division. I visited the premises of M/s. Aurangabad Motor Manufacturing Private Ltd. Chitegaon (henceforth called as assessee for the sake of brevity) on 19-12-1998. It was noticed that assessee was receiving dies/moulds on loan/returnable basis fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee have suppressed the fact of receiving dies/moulds on loan basis with an intent to evade Central Excise duty, as their customers have influenced the price of the excisable goods at lower side, by supplying rent free dies/moulds on loan. Therefore, the proviso to Section 11A (1) is rightly invockable in this case." 3. The assessee carried the matter in appeal before Commissioner (Appeals), Central Excise, Mumbai. The appeal is disposed of by order dated 28-6-2002. It appears that appeal is partly allowed. Learned Commissioner held the assessee liable for penalisation only in forms of Rule 173Q(a) of the Central Excise Rules and hence by changing the designation of the penalty, he has reduced the penalty to Rs. 10,000/- In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for utilization in the manufacture of final products. Accordingly, the fact of suppression of material information from the department is established for applicability of the extended period of limitation of Section 11A of Central Excise Act." In para 12, the learned Commissioner (Appeals) has not recorded a clearing whether he accepts the submissions of the assessee regarding non applicability of Section 11AC. We quote: "Since the buyer was M/s. Bajaj Auto Ltd. working under Modvat scheme, in case higher duties were discharged the same would have been taken credit of by the consignee. This ground is urged to claim absence of any wilful intent to evade duty to justify invoking the penal clauses of Section 11AC and 11AB of Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suppression of facts or contravention of any of the provisions of the Act or of the Rules made there under with intent to evade payment of duty ………." Proviso to Section 11A(1) as quoted hereinabove and Section 11AC within themselves contain verbatim same reasons, existence of which permits the department extended period of limitation and also makes the assessee liable for penalty. We may describe the words in brief as the cases where there is mens rea or intention on the part of the assessee to evade the duty and suppression etc. I aimed for that purpose. We are afraid, having recorded an affirmative finding on that aspect in para 11 of his "judgment and order, the Commissioner (Appeals) could not have taken diagonally opposite view i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso, in case the assessee pays the duty determined under sub-section (2) of Section 11A and the interest payable thereon u/s. 11AB within 30 days from the date of communication of the order of Central Excise Officer determining such duty, the amount of penalty liable shall be 25% of the duty so determined. 8. In the circumstances, we allow the appeal of the department by quashing and setting aside the judgment and order of CESTAT dated 11-3-2006 (Order No. A/487-WZB/MUM/2006/C-IV/EB) and judgment and order dated 28-6-2002 by Commissioner (Appeals), Central Excise, Mumbai and restore the order in original passed by Joint Commissioner. However, we clarify that in case the assessee has paid short duty and interest, u/s. 11AB within 30 days ..... X X X X Extracts X X X X X X X X Extracts X X X X
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