TMI Blog2022 (12) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... M.N. Bharathi, Advocate for the Appellant Smt. Anandalakshmi Ganeshram, Superintendent (AR) for the Respondent ORDER Brief facts are that the appellants are engaged in manufacture of automobile parts and are also availing CENVAT credit of duty paid on inputs, capital goods and input services. On verification of records of the appellant by the Directorate General of Audit, Chennai, it was noticed that the appellant was purchasing / receiving raw materials, namely, steel coils and sheets from their supplier M/s. Sungwoo Gestamp Hi-tech (Chennai) Ltd. who in turn were buying from various places and clearing it as such to the appellant. Thus, they were passing on the CENVAT credit. While doing so, the supplier had opted for uniform price and passed on uniform credit instead of paying an amount equal to the credit availed on the raw materials. This resulted in passing on excess credit or lesser credit which was later rectified by the supplier by way of issuing credit notes when there was excess and supplementary invoices for lesser amount. It was noted by the audit wing that even though credit note was issued by the supplier, the appellant failed to reverse the respective ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also 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 11A, and the interest payable thereon under Section 11AB, 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 shall be twenty-five per cent of the duty so determined. 6. From the facts narrated above, it is clear that the appellant had paid duty along with interest and 25% of penalty on receipt of the Order in Original. The adjudicating authority has not given the option to pay 25% of the penalty in the order passed by him. The jurisdictional High Court in AP Steels (supra) had occasion to analyse a similar issue and held that the appellant has to be given an option to pay 25% penalty if they are paying duty along with interest within 30 days of receipt of the order. Relevant portion of the order is as follows:- 4.2 A careful perusal of the provisions of Section 11AC would show that it opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld commence from the date, when, the order of adjudication is passed in the matter. In other words, it is the learned counsel s submission that the Commissioner (Appeals) could not have given an option of payment of scale down penalty in terms of the first provisos to Section 11AC. 5.2 Learned counsel for the Assessee, Ms. Cynduja, argues to the contrary. In support of her submission, Ms. Cynduja, draws our attention to Section 2(b) of the 1944 Act, which defines the expression Central Excise Officer . For the sake of convenience, the provision is extracted hereafter: 2. ...... (b) Central Excise Officer means Principal Chief Commissioner of Central Excise, Commissioner of Central Excise, Commissioner of Central Excise (Appeals), Additional Commissioner of Central Excise, Joint Commissioner of Central Excise, Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or any other officer of the Central Excise Department, or any person (including an officer of the State Government) invested by the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963 (54 of 1963) with any of the powers of a Central Excise Of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, the show cause notice proposes to impose duty in the sum of Rs. 12,00,000/- on an Assessee. The Assessee challenges the imposition of duty and the Adjudicating Authority, after hearing the Assessee and the representative of the Revenue, comes to the conclusion that the demand should be confirmed only to the extent of Rs. 10,00,000/-, as against what was proposed in the show cause notice. If, the Revenue were to carry the matter in appeal, and the Appellate Authority held that the original proposal ought to be sustained, which is that, the demand ought to be confirmed at Rs. 12,00,000/-, would then, the Revenue contend that the penalty should be imposed keeping in mind, the order of the Adjudicating Authority and not that of the Appellate Authority. In our understanding, the answer, would, necessarily, be that, the Revenue would press for penalty equivalent to the demand as confirmed by the Appellate Authority. The rationale for this stand can only be that the Order-in-Original, if, challenged, can only attain finality on the conclusion of the appellate proceedings. Quite logically then, the time frame for the option given in proviso to Section 11AC will also commence from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner had wrongly demanded 100% of the duty by way of penalty and the Assessee was under no obligation to pay it, the Assessee preferred an appeal before the Commissioner (Appeals) as well as before the Tribunal. Neither of these authorities paid heed to the terms of the first proviso to Section 11AC of the Act. 21. As far as we are concerned, no one can say that if the Assistant Commissioner had in fact imposed only 25% of the duty amount by way of penalty (as he should have), the Assessee would not have paid the penalty amount within 30 days of the adjudication order. However, the benefit of doubt in this regard must go to the Assessee considering the bona fides, which are obvious from the fact that the Assessee debited the duty amount on the date of the search, well before a show cause notice was issued to it. Under these circumstances, we can only inter that if the correct penalty had been imposed upon the Assessee, he could have paid it within the time prescribed. 22. The fact that the Assistant Commissioner levied an incorrect penalty left the Assessee with no option but to challenge it otherwise he would have had to pay the full penalty amount, which is statutoril ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
