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TMI Blog2019 (9) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of records, it is observed that the learned Commissioner(Appeals) has failed to bring on record any ingredient of suppression of facts with an intent to evade payment of duty. There is nothing found regarding the ingredient of suppression of facts, fraud, collusion or any willful misstatement etc. Penalty set aside - appeal allowed - decided in favor of appellant. - Excise Appeal No.148 of 2009 - FINAL ORDER NO. 77085/2019 - Dated:- 23-9-2019 - SHRI P.K.CHOUDHARY, MEMBER (JUDICIAL) AND SHRI C.J.MATHEW, MEMBER(TECHNICAL) Shri N.K.Choudhary, Advocate for the Appellant (s) Shri Tapas Kr. Mondal, Authorized Representative for the Respondent (s) ORDER The appellants are in appeal against the Order passed by the Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as indicated against Sl. No. (1) to (4) Supra. Others are neither represented nor is there any request for adjournment. Adjournment has been sought by Sl. No. (8), (9) (10). Since it is a batch matter, adjournment is not being granted. All the above appeals raise the common question that if duty and interest are paid before issue of Show Cause Notice, then can penalty be imposed? The prayer in all the appeals is for vacating the penalty imposed under Section 11AC. The issue is no longer res integra. The Hon ble Apex Court has delivered its verdict in Dharmendra Textiles Processors Vs. Union of India reported in 2008 (231) ELT 3 (S.C.) wherein it has been held that. Penalty- Mandatory penalty- Lesser penalty not imposable- No d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unrelated buyers at the factory gate in respect of stock transfers. The transactions were duly recorded in their books of account. On being pointed out, they immediately deposited the Central Excise duty along with appropriate interest. 4. On perusal of records, we observe that the learned Commissioner(Appeals) has failed to bring on record any ingredient of suppression of facts with an intent to evade payment of duty. We do not find any finding regarding the ingredient of suppression of facts, fraud, collusion or any willful misstatement etc.. Our view is further fortified by the judgement of Hon ble Supreme Court in the case of Union of India vs. Rajasthan Spinning Weaving Mills as reported in 2009 (238) E.L.T. 3 (S.C.). The relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions 11A and 11AC not only operate in different fields but the two provisions are also separated by time. The penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in Section 11AC. 19 . From the aforesaid discussion it is clear that penalty under Section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. 20 . At this stage, we need to examine the recent decision of this Court in Dharamendra Textile (supra). In almost every case relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the IT Act ) taking the stand that Section 11AC of the Act is identically worded and in a given case it was open to the assessing officer not to impose any penalty. The Division Bench made reference to Rule 96ZQ and Rule 96ZO of the Central Excise Rules, 1944 (in short the Rules ) and a decision of this Court in Chairman, SEBI v. Shriram Mutual Fund Anr. [2006 (5) SCC 361] and was of the view that the basic scheme for imposition of penalty under section 271(1)(c) of IT Act, Section 11AC of the Act and Rule 96ZQ(5) of the Rules is common. According to the Division Bench the correct position in law was laid down in Chairman, SEBI s case (supra) and not in Dili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alf of the revenue as follows : 5. Mr. Chandrashekharan, Additional Solicitor General submitted that in Rules 96ZQ and 96ZO there is no reference to any mens rea as in section 11AC where mens rea is prescribed statutorily. This is clear from the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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