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2009 (8) TMI 619

..... lants had opted for compounded levy scheme from September, 1997 to March, 2000 and therefore, opted to discharge the duty liability under Rule 96Zo(3) of the erstwhile Central Excise Rules, 1944 read with section 3A of Central Excise Act, 1944. Thereafter, a show cause notice came to be issued on 4th of December, 2006 requiring the appellants to satisfy the authorities as to why penalty should not be imposed in terms of statutory provisions. Held that- the proceeding under Rule 96Z0 are independent and distinct from those under the proviso to Section 11A. In these circumstances, the contention on behalf of the appellants that applying principle behind Section 11A, the authority could not have invoked powers under Rule 96ZO after the expiry of the period of 5 years cannot be accepted. Thus the appeal is failed. - E/1076/2009-EX(BR.) - 738/2009-EX(PB) - 12-8-2009 - R.M.S. Khandeparkar, President and Shri M. Veeraiyan, Member (T) Shri Vikrant Kakkaria, advocate, for the Appellant. Shri K.P. Singh, DR, for the Respondent. ORDER [Order per: Justice R.M.S. Khandeparkar, President (for the Bench) (Oral)] Heard at length the advocate for the appellants and learned DR. This appeal arises fr .....

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..... period from the date of cause of action. Besides Section 1 IA of the Central Excise Act, 1944 which deals with the power of the authority to initiate action for recovery of duty clearly provides maximum period of 5 years and that too, in the circumstances specified thereunder. Being so, the excise duty which is payable under different provisions of the same statute, though provisions of Section 11A of the said Act would not be attracted, yet the principle thereunder would apply even in relation to the proceedings under Rule 96Z0(3), as it is settled law that when there is no specific period of limitation prescribed for taking particular action, the same has to be initiated within a reasonable period. Considering the maximum period of 5 years prescribed under Section 11A for recovery of duty and that too in specified circumstances, according to the learned advocate, it cannot be presumed that proceedings for similar action in terms of Rule 96Z0 could be initiated even beyond period of 5 years or that having so initiated, it can be said that same are initiated within a reasonable period. Reliance is sought to be placed in the following decisions:- (1) Collector of Central Excise, Ja .....

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..... action to be taken under the said Act or rules made thereunder but will be attracted only to cases where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously re funded. The section also provides for an extended period of limitation to certain contingencies and situations. It was held that the provisions of Section 11A of the said Act would have no application to any action taken under Rule 57-1 of the Central Excise Act, 1944 prior to its amendment on 6-10-98 and Rule 57-I of Rules are not in any manner subject to I IA of the said Act. 8. Even in case of Commissioner of Customs, New Delhi v. CT. Scan Re search Centre case, it was held that in cases where the instances specified under Section 28(l) of the Customs Act, 1962 are not specific, the said provisions of law would not be attracted and it would not debar the authorities from taking proper action on the bar of limitation under the provision of Section 28(1) of the said Act. In that regard, reference was made to its earlier decisions of CC (Import) Mumbai v. Jagdish Cancer and Research Centre reported in 2001 (132) ELI. 257 (S.C.) = 2001 (6) SCC 483. In other words, in the absen .....

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..... of actual payment of the outstanding amount; and (ii) a penalty equal to such outstanding amount of duty or ₹ 5.000/- whichever is greater: Provided further that if the manufacturer fails to pay the total amount of the duty payable for each of the months from September, 1997 to March, 1998 by the 30th day of April, 1998. he shall also be liable to pay a penalty equal to the outstanding amount of duty as on 30th day of April, 1998 or five thousand rupees whichever is greater." 11. If one peruses the above provisions of law relating to imposition of penalty, it will be at once clear that to impose the penalty under the above provisions of law, the pre-conditions stipulated for application of extended period of limitation under Section 11A or 11AC are not attracted and that is the basic difference between Section 11A or 11AC and the above quoted provisions of law. It is to be borne in mind that the above provisions of law were formulated under a scheme which was drawn for the benefit of manufacturers, giving option to the manufacturers to choose the method of payment of duty. The Legislature has in its wisdom provided penalty in cases of failure to comply with the obligatio .....

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