TMI Blog2014 (11) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... with intent to evade payment of duty, as the respondents have cleared the modvatable inputs to their customers as warranty replacement without reversing the modvat credit taken on them and without following any procedure prescribed under the Central Excise Rules. Once the contravention of Rule and suppression of facts have been proved for invoking penal provisions stipulated under Section 11AC read with Rule 57(I) (4) of CER, the imposition of penalty becomes mandatory on the part of adjudicating authority. penalty is imposable under Rule 57(I) (4) of CER read with Section 11AC of CEA, pertaining to the period from 23.07.1996 to 28.09.1996. - Following decision in UOI Vs. Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - Decided in favour of Revenue. - E/1017/2000 - FINAL ORDER No. 40779 / 2014 - Dated:- 17-11-2014 - Shri R. Periasami, J. For the Appellant : Shri P. Arul, Supdt. (AR), For the Respondent : Shri V.S. Manoj, Adv. JUDGEMENT Consequent on the Hon ble High Court of Madras Order dated 30.01.2014, the Revenue appeal is taken up for denovo consideration. 2. The brief facts of the case are that the respondents ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thereafter. Therefore, the Revenue having raised such a ground before the Tribunal, the Tribunal ought to have considered the issue and rendered a finding. Without doing so, the Tribunal merely observed that they need not interfere with the decision of the lower appellate authority as regards the penalty for the brief period from 23.07.1996 to 28.09.1996, when the contention of the Department that post 28.09.1996 also the Department was entitled to levy penalty and that the period covered for adjudication was from 01.04.1994 to 30.09.1998. Hence, this question requires consideration of the Tribunal. 6. Accordingly, the matter is remitted back to the Tribunal directing it to consider the question of levy of penalty under Rule 57 I (4) of the Central Excise Rules, 1944 for the period post 23.07.1996 in accordance with law after giving opportunity to both sides. 3. Heard both sides. 4. The Ld. AR appearing on behalf of the Revenue reiterated the findings of the adjudicating authority and the grounds of appeal. The show cause notice as well as in the adjudication order, the contravention of the provisions have been clearly brought out and there was a clear finding given b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the show cause notice dated 17.08.99 was issued to the respondent invoking the provisions of Section 11A and also for imposition of penalty under Section 11AC read with Rule 57(I) (4) of CER and for imposition of penalty under Rule 173 Q of CER. The relevant portion of the show cause notice is reproduced as under:- 2. Whereas it appears that M/s. Eurotherm has contravened the provisions of Rules 52A, 57F of the CER, 1944 in as much as they have not reversed the credit availed on the inputs [as set out in Annexure B ] cleared to their customers as warranty replacements and also to their service department and also Rules 9(1) read with Section 11A of CEA,1944, Rules 52A, 173 G of the CER, 1944 in as much as they cleared controllers, drivers etc. (as set out in Annexure-C) without raising invoice, without payment of duty and without following any excise procedure, to their customers as replacement for the products supplied earlier. 3. Whereas it further appears that M/s. Eurotherm has deliberately suppressed the fact by not disclosing the clearance of the inputs, finished products to their customers as warranty replacement and to their service department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the rules made there-under with intent to evade payment of duty. In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It is therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice, the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A (2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assesssees it was also submitted that Sections 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mean that though the application of Section 11AC would depend upon the existence or otherwise of the conditions expressly stated in the section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. That is what Dharamendra Textile decides. The Hon ble Apex Court s above Order squarely applicable to the present case as already discussed above that the ingredients for imposition f penalty has been established in the present case. The Ld. Advocate relying on the above case law and CCE, Coimbatore Vs. Elgi Eqpts. Ltd. (supra), in their favour is not applicable to the facts of this case as in the present case both the ingredients of Section 11AC and Rule 57 (I) (4) of CER have been satisfied. By respectfully following the Apex Court s decision, I hold that the penalty is imposable under Rule 57(I) (4) of CER read with Section 11AC of CEA, pertaining to the period from 23.07.1996 to 28.09.1996. Accordingly, the appeal filed by the Revenue is allowed to the extent of imposition of penalty by the adjudicating authority in respect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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