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2015 (2) TMI 562 - HC - Central ExciseWrongful availment of Cenvat credit - penalty under Section 11AC of the Central Excise Act and Rule 173Q - Whether the CESTAT is correct in setting aside the penalty imposed under section 11AC of the Central Excise Act, 1944 and Rule 173Q of the Central Excise Rules, 1944 in the case of clandestine removal of goods contravening the provisions of the Central Excise Law - Held that:- Section 11AC of the Central Excise Act was introduced by Finance (No.2) Act, 1996 with effect from 28.9.1996. Section 11AC of the Central Excise Act gets attracted 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 mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of 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 11A, shall also be liable to pay a penalty equal to the duty so determined. With regard to the issue that once Penalty is imposed under Rule 173Q of the Central Excise Rules, no penalty could be imposed under Section 11AC of the Central Excise Act, when Section 11AC was introduced by Finance (No.2) Act, 1996 with effect from 28.9.1996, there is no bar in Section 11AC of the Central Excise Act to impose of penalty under Rule 173Q of the Central Excise Rules. Nevertheless, when Finance (No.2) Act 1996 brought in amendment by way of introduction of Section 11AC and other provisions, there was no corresponding amendment to Rule 173Q holding that if penalty is leviable under Section 11AC, no penalty could be levied under Rule 173Q of the Central Excise Rules. Penalty under Rule 173Q of the Central Excise Rules is consequent to confiscation of goods, whereas penalty under Section 11AC of the Central Excise Act is equivalent to the duty determined. Therefore, there appears to be no mutual exclusion in relation to levy of penalty under Rule 173Q and Section 11AC. - following the decision of the Supreme Court [1999 (8) TMI 142 - SUPREME COURT OF INDIA] and the decision of this Court [2014 (12) TMI 654 - MADRAS HIGH COURT] - Decided in favour of Revenue.
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