TMI Blog2009 (11) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... AT. Tribunal has confirmed the levy of penalty and set aside the order with regard to charging of interest under Section 11 of the Act. Held that- Since the demand relates to the period subsequent to 28-9-1996 and the earlier provision of Section 115 was not considered by the Tribunal, the impugned order of the Tribunal is set aside on this point and remand the matter to the Adjudicating Authority to decide the whole issue with regard to charging of interest keeping in mind the provisions contained in unamended Section 11AB of the Act. This appeal filed by the revenue is accordingly answered. - Tax Appeal No.572 of 2007 with Tax Appeal No.869 of 2007 - - - Dated:- 18-11-2009 - K.A. Puj and Rajesh H. Shukla, JJ. Shri Hardik P Modh, for the Appellant. S/Shri Y.N. Ravani with Ankit Shah, for the Respondent. [Judgment per: K.A. Puj, J. (Common) (Oral )]. - Since both Tax Appeals one flied by the assessee and other one filed by the Revenue, are arising out of the same order of the CESTAT and since both these appeals are heard together, the same are being disposed of by this common judgment and order. 2. Tax Appeal No. 572 of 2007 is filed by the assessee. This appeal w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow-cause as to why interest at the prescribed rate should not be charged and recovered from them under provisions of Section 1IAA of the Act. 6. After considering the reply given by the assessee and after adjudicating the whole issue, order in original was passed by the Additional Commissioner, Ahmedabad on 30-9-2002 demanding a duty of Rs.5,95,500!- on finished goods valued at Rs.43,04,935/- from the assessee and also demanding the central excise duty of P 97,063/- involved on the inputs under Proviso to Section11A (1) of the Act. The Additional Commissioner has also imposed penalty of Rs.,96,563/- under Section 11AC read with Rule 173Q of the erstwhile Central Excise Rules, 1944 and levied interest at the prescribed rate under Section 11AA of the Act. 7. Being aggrieved by the said order, the assessee preferred an appeal before the Commissioner (Appeals), Central Excise, Ahmedabad, who vide his order dated 7-7-2005 confirmed the demand, penalty and interest raised and/or charged by the Additional Commissioner. 8. Being further aggrieved by the decision of the Commissioner (Appeals), the assessee preferred an appeal before the CESTAT. The Tribunal vide its order dated 27-10- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the amount of Excise Duty levied in the order passed by the adjudicating authority. For that purpose, it is worthwhile to have a close took at the provisions of Section- lIAC of the Act. It deals with penalty for short levy or non-levy etc. in certain cases. It reads asunder: "11AC 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 willful: 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 11 A, 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 be twenty-five percent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid within thirty days of the communication of the order by which such increase in the duty takes effect." 12. This very question has come up before the Delhi High Court in the case of K.P.Pouches (P) Limited v. Union of India 2008(228) E.L.T.31 (Delhi) wherein the Court after discussing the controversy between the parties in paragraph 27 of the judgment has observed that to obviate any similar situation from arising in future, the adjudicating authority in its adjudication order under the Act should explicitly set out the options available to the Assessee under Section 11AC of the Act. Once the chances are made known to the assessee ant it still does not take advantage of the first Proviso to Section 11AC of the Act, it will be entirely at its own peril. The Court, therefore, held that it would be beneficial both from the point of view of the revenue as well as the assessee, if the options available to the assessee are mentioned in the adjudication order itself. 13. Pursuant of the above judgment of the Delhi High Court, the Central Excise department has issued Circular on 22-5-2008 wherein it is clarified that in all the cases wherein penalty under Section 11 AC of the Act i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 25% of the penalty. Since this aspect was not considered by the authorities below, we are of the view that interest of justice would better be served if the matter is remanded to the adjudicating authority with a direction to frame an order de novo after giving the assessee an option to pay duty amount within 30 days by making it explicitly clear in the order itself that if the assessee wants to avail such option, he is permitted to do so. 16. In the above view of the mater, we allow the appeal filed by the assessee for statistical purpose and remand the matter to the Additional Commissioner to pass a fresh order in light of the observations made hereinabove. It is, however, made dear that looking to the peculiar facts of the case, the Court has adopted this course and it shall not be treated a precedent. 17. The question referred to us are answered accordingly. 18. So far as the appeal filed by the revenue is concerned, the Tribunal has deleted the interest only on the ground that the demand relates to the period of 1997 to 2000 and on that count, it was held that no interest is leviable in respect of demand prior to 11-5-2001. It is, however, contended before us that whil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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