TMI Blog2011 (7) TMI 907X X X X Extracts X X X X X X X X Extracts X X X X ..... o escape penal liability by virtue of the fact that payment of duty was evaded within the normal period - Decided against the assessee - E/519/2004 - - - Dated:- 14-7-2011 - Shri P.G. Chacko, Shri P.R. Chandrasekharan, JJ. Appearance: Shri V.K.Agarwal, Authorised Representative (SDR) for the respondent Per: P.G. Chacko: This appeal filed by the Executive Engineer of Mhaishal Pump House No.2, Maharashtra Krishna Valley Development Corporation, is against the demand of duty of Rs. 13,93,019/- and equal amount of penalty. In adjudication of a show-cause notice dated 24/05/2001, the original authority had confirmed demand of the above amount of duty against the appellant under Section 11A(2) of the Central Excise Act for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... being a State Government undertaking required government funds for payment of Central Excise duty and that duty could not be paid on the 88 pipes for want of funds. The show-cause notice issued by the department relies on this statement of the functionary of the Corporation as also on the RG-1 register and other statutory records including RT-12 returns for the period July 1999 to June 2000. These returns did not reflect clearance of the aforesaid 88 pipes. On the basis of these evidentiary materials, it was alleged that the appellant had suppressed clearance of 88 pipes with intent to evade payment of duty. On this basis, the show-cause notice invoked the extended period of limitation under the proviso to Section 11A(1) of the Act for reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to support the appellant's contention that 47 pipes were available in their registered premises and only 41 had been cleared without payment of duty during the period of dispute. That these pipes were in fully manufactured condition when entered in the RG-1 register is also a fact clearly admitted by the assessee under Section 14 of the Central Excise Act. It may be true that duty on these goods could not be paid for want of funds. The fact, however, remains that the amount of duty payable on these goods is yet to be paid by the appellant. It appears from the records that an amount of Rs. 6.5 lakhs was deposited by them on 17/06/2002 as directed by the lower appellate authority. Obviously, there was no voluntary deposit of duty by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pex court has made it mandatory for the departmental authorities to impose penalty equal to duty on the assessee on the established ground of suppression of facts with intent to evade payment of duty. On being pointed out by the Bench that a part of the demand of duty is within the normal period of limitation, learned SDR submits that this factual aspect is irrelevant insofar as applicability of Section 11AC is concerned. It is argued that, even where the demand of duty is for the normal period of limitation, mens rea can be found against the assessee, in which event the penal provisions of Section 11AC would get attracted. In other words, according to learned SDR, the appellant is liable to pay penalty equal to the entire amount duty dema ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 11AB of the Act. 7. Upon careful consideration of the submissions, we have found substance in the above arguments. As noted by the Hon'ble Supreme Court in the case of Rajasthan Spinning Weaving Mills (supra), the grounds embodied in the proviso to Section 11A(1) of the Act for invoking the extended period of limitation for recovery of duty not levied, not paid, short-levied, short-paid, etc. are identical to those embodied in Section 11AC for imposition of penalty on the defaulter. That identical grounds have been separately specified in the texts of the two provisions is significant. Had it been the intention of the legislature that Section 11AC was applicable only to cases where the proviso to Section 11A(1) was invoked for r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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