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TMI Blog2022 (12) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... on excess credit or lesser credit which was later rectified by the supplier by way of issuing credit notes when there was excess and supplementary invoices for lesser amount. It was noted by the audit wing that even though credit note was issued by the supplier, the appellant failed to reverse the respective credit availed. They did not mention the receipt of those credit notes in their returns nor did they inform the department seeking clarification. The appellant had thus availed excess credit which was not eligible. Show Cause Notice was issued proposing to deny the credit of Rs.40,61,911/- for the period from April 2012 to March 2014 along with interest and for imposing penalties under Rule 15(2) of CENVAT Credit Rules, 2004 r/w Sec. 11AC of the Central Excise Act, 1944. After due process of law, the original authority confirmed the demand along with interest and imposed equal penalty. Against such order, appellant filed appeal before Commissioner (Appeals) who upheld the same. Hence this appeal. 2. The learned counsel Shri M.N. Bharathi appeared and argued for the appellant. He submitted that the appellant is not contesting the duty or interest confirmed by the authorities be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar issue and held that the appellant has to be given an option to pay 25% penalty if they are paying duty along with interest within 30 days of receipt of the order. Relevant portion of the order is as follows:- "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 misstatement 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise or any other officer of the Central Excise Department, or any person (including 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 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate Authority. The rationale for this stand can only be that the Order-in-Original, if, 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 v. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the Assessee, he could have paid it within the time prescribed. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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