TMI Blog2011 (9) TMI 902X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of facts, or contravention of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty shall also be liable to pay penalty equal to the duty so determined. The assessee is also liable to pay interest for the period in question. The Supreme Court in Union of India v. Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] observed that mere payment of differential duty whether before or after the show cause notice would not alter the situation and they would be liable for penalty in case the conditions for imposing such penalty spelt out in Section 11AC of the Act is attracted. Decided in favour of Revenue. - C.M.A. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t existed and Rule 4(2)(a) of the Cenvat Credit Rules, 2001/2002. When the attention of the assessee was drawn to this excess availment of credit, immediately, the differential amount was paid. In spite of such payment, the Department issued show cause notice to the assessee to submit their explanation as to why interest and penalty should not be levied. The assessee in their reply to the show cause notice pleaded that excess credit availed was due to inadvertence and not intentionally and they have proved their bona fides by making payment voluntarily. The assessee further contended that payment of the amount even before the issuance of show cause notice would absolve them from liability to pay interest and penalty. The explanation submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was only after pointing out the defects by the Department, the Assessee paid the differential duty. It is true that duty was paid within a few days after the inspection by the officials of the Department. The Original Authority as well as the Appellate Authority arrived at a finding that payment of duty voluntarily would not absolve the assessee of their liability to pay interest and penalty. CESTAT found that similar case was decided earlier holding that the payment of differential duty well before the issuance of show cause notice would absolve the assessee from their statutory liability of payment of interest and penalty. 8. The core issue is whether the assessee would be absolved from the liability to pay interest and penalty in view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11AC of the Act is attracted. 12. The Supreme Court in Rajasthan Spinning and Weaving Mills very categorically observed that penalty under Section 11AC as the very 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. The Supreme Court by interpreting the earlier judgment in Union of India v. Dharamendra Textile Processors [2008 (231) E.L.T. 3], observed that though the application of Section 11AC would depend upon 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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