TMI Blog2010 (10) TMI 1027X X X X Extracts X X X X X X X X Extracts X X X X ..... of 25% penalty, the duty, interest and penalty are required to be paid within 30 days of communication of the order passed by the adjudicating authority. Further, the reading of proviso (4) would also support this interpretation because the said proviso stipulate that wherever duty amount is increased at any appellate stage, in that case in order to avail the benefit of 25% penalty, the assessee is required to pay differential amount within 30 days of the passing of the order by the appellate authority - the appellant did not comply with the requirements of the provisos to section 11AC of the Act since the appellant did not pay the amount of interest under section 11AC within a period of 30 days from the date of receipt of quantified demand. In view of this admitted position, it is not necessary to go into the details of payment made by the petitioner in respect of duty liability, interest and penalty - question is answered in favor of the Revenue and against the Assessee. Appeal allowed - decided in favor of Revenue. - CENTRAL EXCISE APPEAL NO. 64 OF 2005. - - - Dated:- 13-10-2010 - V.C.DAGA AND R.M.SAVANT, JJ M.I. Sethna, Senior Advocate with J.B. Mishra i/b T.C.Kau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question of law depends upon the meaning to be assigned to the provisos to section 11AC of the Act. Let us turn to text of section 11AC and provisos thereto. 11-AC. Penalty for short- levy or non-levy of duty in certain cases:- 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, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11-A, shall be liable to pay a penalty equal to the duty so determined: Provided that where such duty as determined under sub-section (2) of section 11-A, and the interest payable thereon under section 11-AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of penalty has been stipulated to be 25% of the duty so determined. 7. The second proviso further imposes an obligation that the benefits contemplated by first proviso are to be available if the amount of penalty so determined has also been paid within a period of thirty days. In other words, if the duty as determined under section 11A(2) of the Act by the Central Excise Officer is paid within thirty days then penalty equal to the amount of duty is not required to be paid and the amount contemplated in lieu of the penalty is 25% of the total amount of excise duty determined by the officer concerned. 8. It would further be necessary to notice that 3rd proviso takes care of a situation where duty determined to be payable is reduced or increased by the Commissioner (Appeals), Appellate Tribunal or by the Court; then duty as reduced or increased is required to be taken into account. The first, second and third provisos take care of fluctuation in the assessment of duty at the appellate stage. 9. It is appropriate to notice that the period in question is subsequent to 31st October, 2001 and there is no dispute that the proviso added by Act No. X of 2000 is made applicable with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee was, however, not given any option as to whether he desired to pay the duty within 30 days from the date of the adjudication order. The Court, therefore, took the view that the conclusion reached by the Tribunal that the assessee was liable to pay penalty to the extent 25% of the amount of duty of excise demanded by the officer concerned was unsustainable. While arriving at this conclusion, the Court has also considered the decision of the Apex Court in the case of Dharmendra Textile (Supra) and observed that the provisos first and second which were added in the year 2000 were not the subject matter of consideration before their Lordships in Dharmendra Textile Processor's case (Supra). The Court, therefore, did not find any substance in the contention raised on behalf of the revenue, especially, in the face of express provision made by the four provisos in the year 2000. 13. In the case of Commissioner of Central Excise v. Gopal Fibres Pvt. Ltd., 2010 (256) ELT 10 (Guj.), High Court of Gujarat had an occasion to consider the situation arising out of absence of determination of the amount of interest by the adjudicating authority payable under section 11AB of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he benefit of the first proviso to section 11AC of the Act. Of course, in the event of decrease in the duty liability or interest or penalty, the assessee will be entitled to refund as per the provisions of the Act. 15. The Government of India Ministry of Finance (Department of Revenue) Central Board of Excise and Customs, New Delhi, in order to clarify the above legal position, has issued a Circular No. 898/18/2009-CX, dated 15th September, 2009 reading as under: Subject: Benefit of reduced penalty under provisos to Section 11AC- Whether also available at appeal stage -Regarding. A case has been brought to the notice of the Board wherein a Commissioner (Appeals) had allowed the benefit of proviso to Section 11AC of the Central Excise Act, 1944 to pay penalty at the reduced rate of 25% within 30 days of the communication of the Order in Appeal. Commissioner (Appeals) has read Section 11AC and Section 35F together to arrive at the aforesaid decision. 2. The matter has been examined. The provisions relating to reduction of penalty to 25% are contained in proviso (1) to (4) of Section 11AC. In terms of proviso (1) and (2), a penalty imposed under Section 11AC can be reduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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