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TMI Blog2017 (8) TMI 591X X X X Extracts X X X X X X X X Extracts X X X X ..... outer limit of thirty (30) days of the communication of the order of the Central Excise Officer, the penalty imposed would get reduced to 25% of the duty so determined. It is incumbent on the part of the statutory authorities to bring to the notice of the Assessee that it is entitled to a statutory "benefit" under the first proviso to Section 11AC - the question is answered in favor of the Assessee and against the Revenue - appeal allowed - decided in favor of assessee. - C.M.A. No. 100 of 2016 - - - Dated:- 30-6-2017 - Rajiv Shakdher And R. Suresh Kumar, JJ. For the Appellant : Ms. Cynduja Crishnan for M/s. K. Magesh For the Respondent : Ms.Hemalatha ORDER ( Judgment of the Court was delivered by Rajiv Shakdher, J. ) 1. This is an appeal filed by the Assessee, i.e., A.P.Steels against the judgment and order dated 22.06.2015, passed by the Customs, Excise and Service Tax Appellate Tribunal (in short, the Tribunal ). 1.1. By virtue of the said appeal, the Tribunal has allowed the Revenue's appeal on the issue pertaining to penalty. The Revenue had assailed the order passed by the Commissioner of Central Excise (Appeals) [in short, the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said removal was made with the intent to evade payment of excise duty. 3.4. Upon adjudication, the demand raised via the SCN was confirmed vide order dated 15.05.2009. As a matter of fact, this was a common order, which confirmed the assessment made, not only against the Assessee, but also its Manager, one, Mr.D.Purushothman. 3.5. We may only note that D.Purushothman, lost right upto the Tribunal, and had, consequently, preferred an appeal with this Court, which was numbered as : C.M.A.No.101 of 2016. The said appeal has been dismissed as not pressed, by a separate order passed by this Court, today. 3.6. Continuing with the narrative, the Order-in-Original, in so far as the Assessee was concerned, confirmed the demand not only qua duty, but also vis-a-vis penalty and interest. Since, the Assessee had paid, out of the total demand of ₹ 12,53,255/-, which included Education Cess and Secondary and Higher Education Cess, a sum of ₹ 6,00,000/- prior to the issuance of SCN, the said amount was adjusted. We are informed that after the issuance of SCN, a further sum amounting to ₹ 6,53,684/- has been paid to Revenue. The said amount also stands adjusted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined. Provided further XXXXX Provided also XXXXX Provided also XXXXX Explanation XXXXX 4.2. A careful perusal of the provisions of Section 11AC would show that it operates in two parts. First, where, a determination is made to the effect that 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 mis-statement or suppression of facts, or, in view of contravention of any of the provisions of the Act or the rules made thereunder with the intent to evade duty, then, the person, who is liable to pay duty under Section 11A(2), would also be liable to pay penalty equivalent to the amount of duty so determined. 4.3. Second part of the Section is contained in the first proviso to Section 11AC. The said proviso states that where duty, as determined under Section 11A(2) and the interest payable thereon, under Section 11AB, is paid within thirty (30) 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 Section 11AC, shall be twenty-five per cent of the duty so determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Officer under this Act. 5.3. Based on the aforesaid, Ms.Cynduja, submits that the Central Excise Officer would include the Commissioner of Central Excise (Appeals). 5.4. In the rejoinder, Ms.Hemalatha, drew our attention to the provision under Section 12E of the 1944 Act, based on which, it was argued by her that the Commissioner (Appeals) could exercise only those powers of the Central Excise Officer, which are specified in Section 14, or Chapter VIA of the 1944 Act. Learned counsel, thus, submitted that the contention of Ms.Cynduja, that the expression Central Excise Officer , as found in the first proviso to Section 11AC of the 1944 Act, should be read to include Commissioner (Appeals), (based on the provisions of Section 2(b) of the 1944 Act), was erroneous. 5.5. The way, we look at the issue raised before us, has, in our view, got nothing to do with Section 2(b), or Section 12E of the 1944 Act. What is required to be considered, in our opinion, is whether the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged, can only attain finality on the conclusion of the appellate proceedings. Quite logically then, the time frame for the option given in proviso to Section 11AC will also commence from the date of the Appellate Order. 6. In this context, we may say that the reliance placed by the Tribunal on the judgement of the Bombay High Court in : Commissioner of Central Excise and Customs, Aurangabad Vs. V.V.Patil S.S.K. Limited, 2007 (215) E.L.T. 23 (Bom.) was misdirected. According to us, the Tribunal has completely misunderstood the ratio of the judgement. This was a case, in which, the Bombay High Court held that there was no discretion vested in the Authorities to reduce the penalty below the minimum prescribed under the Act. The Court was not called upon to deal with the issue, that we have been called upon to decide. According to us, the judgement is completely distinguishable from the facts obtaining in the present case. 6.1. An apposite judgement, in our view, would be the judgement of the Division Bench of the Delhi High Court in K.P.Pouchers (P) Ltd. V. Union of India, 2008 (228) E.L.T. 31 (Del). In this, none of the statutory authorities had given an option to the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. The fact that the Assistant Commissioner levied an incorrect penalty left the Assessee with no option but to challenge it otherwise he would have had to pay the full penalty amount, which is statutorily not leviable, and then claim a refund of 75% excess penalty paid. Having rightly challenged the imposition, it cannot be said that the Assessee had no intention of paying the penalty within time and saddle itself with an avoidable liability. On the contrary, it could easily be assumed (given the conduct of the Assessee) that if the correct penalty has been imposed, the Assessee would have paid it during the time prescribed. 23. Since the statutory authorities have themselves acted illegally and contrary to the first proviso to Section 11AC, the Assessee cannot be faulted for challenging the order passed by the Assistant Commissioner. Unfortunately, the error committed by the Assistant Commissioner was repeated by the Commissioner (Appeals) as well as by the Tribunal. 24. Consequently, the failure of the Assessee to pay the penalty amount within 30 days of the adjudication order cannot be held against the Assessee on the facts of the present case. (emphasis is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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