TMI Blog2013 (6) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... that these proviso to section 11AC of the Act have been specifically inserted to ensure speedy recoveries of the disputed amount. It is an incentive given to the assessee that if he pays the duty amount along with interest, the penalty is reduced to 25% of the duty . This provision is beneficial to the department as well as the assessee as rightly pointed out by Delhi High Court in K.P. Pouches (P) Ltd. [2008 (1) TMI 296 - HIGH COURT OF DELHI]. and therefore, the assessee should be made aware of the option available to him. It will be open to the appellant assessee to deposit 25% of the penalty determined by the adjudicating authority within 30 days from today to avail benefit of reduced penalty under Second Proviso to Section 11AC of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he CESTAT has rightly imposed penalty u/s 11AC of the Act relying the judgment of Apex Court in case of Dharmendra Textiles Processors Supra whereas the Apex Court in case of UOI vs. Rajasthan Spinning and Weaving Mills reported in 2009 (238) ELT 3 (SC) has held that u/s 11AC penalty as the word suggest, is punishment for an act for deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section, whereas the such ingredients are not present in appellant's case? (b) Whether in the alternative, the CESTAT was justified in not considering that duty was paid much prior to the passing of the order by the adjudicating authority, therefore, there was no justification for imposing 100% pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11AC of the Central Excise Act, 1944. 10. The Commissioner (Appeals) allowed the appeal in part quashing the penalty under Section 11AC of the Act. In a review application the Commissioner, Central Excise by order dated 6.11.2009 directed the Addl. Commissioner (Review), Central Excise Commissionerate, Kanpur to file an appeal under sub-section (2) of Section 35B of the Act only to the extent of imposition of penalty under Section 11AC of the Act. 11. The Customs, Excise and Service Tax Appellate Tribunal, New Delhi by order dated 7.6.2011, allowed the appeal and restored the order dated 31.3.2009 passed by the adjudicating authority. 12. It is submitted by learned counsel for the appellant that the assessee could not take benefit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty has been imposed, the Assessee would have paid it during the time prescribed. 23. Since the statutory authorities have themselves acted illegally and contrary to the first proviso the section 11AC, the Assessee cannot be faulted for challenging the order passed by the Assistant Commissioner. Unfortunately, the error committed by the Assistant Commissioner was repeated by the Commissioner (Appeals) as well as by the Tribunal. 24. Consequently, the failure of the Assessee to pay the penalty amount within 30 days of the adjudication order cannot be held against the Assessee on the facts of the present case. 25. Learned counsel for the Assessee has brought to our notice that an amount of Rs.50,000/- was deposited before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in all the cases, where penalty under Section 11AC of the Act is imposed, the provisions contained in the First and Second Proviso to Section 11AC should be mandatorily mentioned in the order in original itself by the adjudicating authority. The Circular dated 22nd May, 2009 is quoted as below:- "F. No.208/07/2008-CX-6 Government of India, Ministry of Finance, Department of Revenue Central Board of Excise Customs ****** New Delhi Dated the May 22, 2008 To The Chief Commissioner of Central Excise (All) The Chief Commissioner of Customs and Central Excise (All) The Director Generals (All) The Commissioner of Central Excise (All) The Commissioner of Central Excise (Appeals) (All) Subject: Observation of Delhi Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as rightly pointed out by Delhi High Court and therefore, the assessee should be made aware of the option available to him. 3. In view of the points as discussed above, Board has decided that in all the cases, wherein penalty under section 11AC of the Act is imposed, the provisions contained in first and second proviso to section 11AC should be mandatorily mentioned in the Order-in-Original itself by the adjudicating authority . 4. The field formation may be suitably informed . Yours faithfully (Rahul Nangare ) Under Secretary to the Government of India Copy to: Commissioner (Customs), Central Board of Excise Customs- The above mentioned circular may be examined for issue with respect to Customs cases also." 14. In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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