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2015 (11) TMI 881 - RAJASTHAN HIGH COURTEvasion of duty - Imposition of penalty - whether levy of penalty is automatic under RVAT - Held that:- There is no substance in the argument of the officer in-charge that penalty under section 61 of the 2003 is automatic on short-payment of tax due being found. Section 61(1) of the 2003 Act delineates the situations in which avoidance/evasion of tax through acts of concealing and misleading or "in any other manner" (underlining1 mine) can be visited with penalty. The language of section 11AC(1)(a) of Central Excise Act, 1944 is in someways similar to that of section 61 of the 2003 Act, inasmuch as while first specifically detailing the occasions for levy of penalty, it also later provides a general ground for the levy of penalty, i.e., "contravention of any of the provision of this Act or Rules made thereunder" - Penalty for non-payment or short-payment of excise duty can be levied under section 11AC of the Central Excise Act, 1944. Section 11AC(1)(a) of the 1944 Act provides that penalty for shortlevy or non levy of duty in certain cases. It, inter alia, provides that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud or collusion or any wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or other rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under section 11A shall also be liable to pay a penalty equal to the duty so determined. All sale transactions conducted by the assessee in the year relevant to levy of tax in the State of Rajasthan were indicated in its books of accounts and also duly invoiced. There was no attempt to defraud the revenue by any concealment or misinformation. No finding of reckless/mala fide classification sought with regard to the goods sold has been arrived at. The dispute between the assessee and the Revenue was bona fide and related merely to the issue of classification and consequent rate of tax under the 2003 Act leviable on the sale of goods by the assessee, i.e., "Priyagold TM Toffito Mango Cream Toffee". The dispute was therefore a bona fide one as to the interpretation/ classification of the products sold by the assessee for the purpose of levy of tax. Such a dispute did not supply any of the pre conditions for levy of penalty under section 61 of the 2003 Act. - Decided against Revenue.
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