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2015 (5) TMI 977 - AT - Central ExcisePenalty u.s 11AC - Appellant did not collect the central excise duty attributable to the removal of tractor parts - Held that:- Since the manufacturing activity of the appellant was known to the Department through maintenance of various records and Audit conducted by the Central Excise officers from time to time, it cannot be alleged that the appellant has indulged in suppression of facts with intent to evade payment of central excise duty. The invoices issued by the appellant in favour of its buyers clearly indicate that they are undertaking manufacture of tractor parts on job work basis, which according to the appellant falls under the purview of taxable service, on which they had discharged the service tax liability. Payment of service tax proves the bonafides of the appellant that they had no intention to evade payment of central excise duty and accordingly, upon detection of mistake that job work activity will not be consider as service and will fall under the purview of manufacture, the appellant appropriately discharged the central excise duty liability alongwith interest. There is no element of suppression, wilful misstatement, fraud etc. involved in the present case, justifying invocation of the extended period of limitation for issuance of the show cause notice and for adjudication of the proceedings, especially for the purpose of imposition of mandatory penalty. I am also of the view that since, the entire duty liability alongwith interest has been paid by the appellant before issue of show cause notice, the appellant should get the benefit of provisions of section 11A (2B) of the Central Excise Act 1944, according to which, there was no requirement of issuance of show cause notice, once the duty alongwith interest has been paid. Further, since the ingredients mentioned in the proviso to section 11 A and section 11AC of the Central Excise Act are absent in the present case, the question of imposition of penalty does not arise. - impugned order is set aside - Decided in favour of assessee.
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