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2017 (6) TMI 904 - HC - Central ExcisePenalty u/s 11AC - Whether the imposition of the penalty under Section11AC of the Central Excise Act is mandatory or directory? - whether the failure on the part of the Assessee to file requisite declarations and make disclosures qua clearances of waste and scrap in the returns filed in Form RT-12 would bring the case within the ambit and scope of the proviso to Section 11A(1) of the CE Act? - extended period of limitation - Held that: - As is evident upon a plain reading of Section 11A of the CE Act, that the proviso incorporated therein empowers the Central Excise Officer to serve the SCN within the extended period of five years, albeit, from the relevant date, in case, any of the circumstances provided for in the main part of the Section, to which we have made a reference above, arose on account of the reason of fraud, collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules made thereunder, with an "intention to evade" payment of duty by the noticee or his agent - the defining principle for invoking the extended period of limitation is, that there should be an "intention to evade payment of duty" by the noticee or his agent. The fact is that, in so far as the subject waste and scrap is concerned, there was, for a long period of time, clearly an uncertainty, as to whether or not they were excisable goods and hence, amenable to duty as claimed by the Revenue. The mere failure to make declarations/or disclosure of the clearance of waste and scrap in the returns would not amount to suppression in the given facts and circumstances - extended period not invokable. Penalty - Held that: - the payment of penalty under Section 11AC of the CE Act would follow, only if, the finding of fact is returned that there was an escapement of duty, due to a conscious and deliberate wrong doing on the part of the Assessee. Thus, in other words, the penalty under Section 11AC would follow, as night follows day, only if, such a finding is returned. In other words, it will be mandatory to levy penalty only, if, such a finding is reached in the matter. In the instant case, one has not been able to arrive at such a conclusion - penalty set aside. Appeal dismissed - decided against Revenue.
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