TMI Blog2009 (10) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... of the mandatory penalty equivalent to the duty involved. E/CO/219/07 are the cross-objections filed by the assessee. 2. The assessee are engaged in the manufacture of excisable goods viz. BOPP Films falling under Chapter 39 of the schedule to the Central Excise Tariff Act, 1985. They are also availing Cenvat credit of the duty paid on the inputs. 3. The assessee had imported some consignments, which were own exported consignments said to be received back due to rejection by the consignee. They have cleared the part of these consignments, as it is in domestic market as well as for exports. While re-dispatching these goods, they have changed only physical characteristics such as the product length/width by slitting. The assessee have cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 11AB of CEA, 1944 and imposition of penalty under Section 11AC of CEA 1944 read with Rule 25 of C.Ex. Rules, 2002 and Rule 15 of the Cenvat Credit Rules, 2002. 6. The above-mentioned SCN was adjudicated by the Deputy Commissioner confirming duty demand of Rs. 3,82,395/- under Section 11A of Central Excise Act, 1944 and the same was appropriated against the equal amount already paid. The interest under Section 11AB of Central Excise Act, 1944 was charged and also penalty of Rs. 3,82,395/- was imposed under Section 11AC of Central Excise Act, 1944. 7. Being aggrieved, the assessee filed an appeal before the Commissioner (Appeals). The Commissioner (Appeals) has decided the issue vide OIA No. RKR (64)234/2007 dated 30-3-2007, wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade payment of duty. In the assessee s case, the SCN does not allege any suppression of facts with intention to evade payment of duty but merely demands duty and proposes imposition of penalty. In the absence of allegation of suppression of facts with intention to evade payment of duty, the extended period of limitation is not invocable and consequently provisions of Section 11AC of the Act imposing penalty are not applicable. 9. It is also seen that the assessee pays duty of more than Rs. 25 crores every year. In order to avoid further litigation, the assessee paid the duty, on being pointed out, in the hope that no penalty will be imposed on them. However, to their surprise, SCN was issued to them and the penalty imposed. It is the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly in some of the cases of re-dispatch of the goods, the assessee has paid more duty than was due in terms of Rule 16(2) of the Central Excise Rules, 2002. This shows that the non-compliance with the provisions of Rule 16(2) ibid was not deliberate but purely due to oversight. 10. Since the ingredients of proviso to Section 11A(1) of the Act are absent, it seems that the proviso to Section 11A(1) was purposely not invoked in the Show Cause Notice. In the absence of these ingredients, imposition of penalty under Section 11AC is not warranted in the facts and circumstances of the case. The plethora of case laws cited by the learned SDR for imposition of the mandatory penalty under Section 11AC are, therefore, of no avail. 11. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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