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TMI Blog2024 (10) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.12.2012. The provisions of Section 11A(2) of the Central Excise Act, 1944 clearly mandates that when the assessee has paid the duty along with interest and informs the Central Excise officer concerned, no notice shall be served in respect of such duty paid and no penalty is leviable under the provisions of the Act. Even otherwise, there are no justification to attribute suppression on the part of the appellant with an intent to evade payment of tax. The Ld. Lower Appellate Authority has also observed that it happened due to the ignorance of law on the part of the appellant. As the appellant has accepted the need to include the amortized cost of the capital goods supplied free of cost in the value of finished products supplied to M/s. Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the machines was not required. However, during the preventive check conducted by the officers of the Commissionerate on 28.08.2012, the appellant was directed to amortize the cost of the said moulding machines supplied free of cost by including the said value in the value of the finished goods manufactured and cleared to M/s. Hanil. Soon after, the appellant has calculated the duty involved as Rs.2,94,268/- which was paid on 13.08.2012 within three days of the visit of the officers and also paid the interest of Rs.30,160/- on 10.09.2012. 1.3 However, the appellant was issued with a Show Cause Notice No. 40/2012 dated 28.12.2012 by the Deputy Commissioner of Central Excise, Chennai, proposing appropriation of the amounts of duty and int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcise Act, 1944 relying on the decision rendered by the jurisdictional High Court of Madras in the case of Commissioner of Central Excise, Chennai IV Vs. Binny engineering Ltd. [2014 (302) ELT 188 (Mad.)] wherein it was held that there must be a factual finding rendered by stating that the act of the assessee attracts the conditions expressly contemplated under Section 11 AC of the Central Excise Act, 1944 and in absence of factual finding on this aspect, imposition of penalty cannot be sustained. 2.2 It was also submitted that receipt of the capital goods i.e., moulding machines was different from the moulds which are consumables and further they have taken the credit of the duty paid on the machines and it was a bona fide mistake on their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ibid is not justified. The provisions of Section 11A(2) read as under:- The person who has paid the duty under clause (b) of sub-section (1), shall inform the Central Excise Officer of such payment in writing, who, on receipt of such information, shall not serve any notice under clause (a) of that sub-section in respect of the duty so paid or any penalty leviable under the provisions of this Act or the rules made thereunder. 7. Entire amount of duty was paid on 31.08.2012 within three days of the visit of the officers which was on 28.08.2012 and applicable interest was paid on 10.09.2012 whereas the Show Cause Notice was issued only subsequent to payment of interest and duty which was on 28.12.2012. 8. The above provision clearly m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act the proviso it must be shown that the excise duty escaped payment by reason of fraud, collusion or wilful mis-statement or suppression of fact or contravention of any provision of the Act or of the Rules made thereunder with intent to evade payment of duty. In that case the period of six months would stand extended to 5 years as provided by the said proviso. Therefore, in order to attract the proviso to Section 11A(1) it must be alleged in the show cause notice that the duty of excise had not been levied or paid by reason of fraud, collusion or wilful mis-statement or suppression of fact on the part of the assessee or by reason of contravention of any of the provisions of the Act or of the Rules made thereunder with intent to evade paym ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty or that the assessee was guilty of fraud, collusion, mis-conduct or suppression to attract the proviso to Section 11A(1) of the Act. There is considerable force in this contention. If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the excise department places reliance on the proviso it must be specifically stated in the show cause notice w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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