TMI Blog2014 (5) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty shall also be liable to pay penalty equal to the duty so determined. The assessee is also liable to pay interest for the period in question. Inspection was conducted on 19th August, 2000. The assessee paid the differential duty on 22nd August, 2000. The show cause notice was issued only on 20th February, 2004. In spite of payment of the entire duty amount even before issuance of show cause notice, and in fact within three days of inspection, the Original Authority imposed penalty equal to the duty amount determined - When the assessee is having the benefit of payment of penalty at 25% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 90 of Central Excise Tariff Act, 1985. The premises of the assessee was inspected by the Preventive Group, Chingleput Division on 19th August, 2000 and on verification of the records it was found that the assessee had adopted incorrect assessable value in the clearance of Wiring Harness for the period from 1st June, 2000 to 15th August, 2000 under stock transfer to their sister unit at Pune where it was sold at a higher price, thereby resulting in under valuation of Rs. 12,36,582/- and short payment of differential duty to the tune of Rs. 1,97,853/-. When this defect was pointed out, the assessee discharged the differential duty on 22nd August, 2000. Thereafter, a show cause notice was issued to the assessee by the Department on 20th Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proviso to Section 11A(1) of the Central Excise Act, 1944 on reason of suppression of facts or wilful misstatement or contravention of the provisions of Central Excise Act and Rules made thereunder with intention to evade payment of duty ? Rival Submissions : 7. She learned Standing Counsel for the Revenue challenged the order passed toy the Commissioner (Appeals) as confirmed by the order dated 3rd August, 2005 on the file of CESTAT on the ground that direction to pay penalty was set aside on an erroneous view that in case the differential duty was paid before issuance of show cause notice, no penal consequences would follow. According to the learned counsel, duty was paid only after the inspection by the officials of the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to a related person. The Original Authority further observed that the goods were neither captively consumed nor consumed on their behalf in the production or manufacture of other articles and as such, a clear case of duty evasion was made out. It is also true that immediately, the assessee paid the differential duty. 10. The core issue is whether the assessee would be absolved from the liability to pay interest and penalty in view of their payment of differential duty before the issuance of show cause notice. 11. Section 11AB deals with interest on delayed payment of duty. Similarly Section 11AC deals with penalty for short-levy or non-levy of duty in certain cases. Both these provisions indicate that in case the duty has not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evade duty by adopting any of the means mentioned in the section. The Supreme Court by interpreting the earlier judgment in Union of India v. Dhaamendra Textile Processors [2008 (231) E.L.T. 3], observed that though the application of Section 11AC would depend upon existence or otherwise of the conditions expressly stated in the Section, once the section is applicable in a case the concerned authority would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. 15. In view of the judgment of the Supreme Court in Rajasthan Spinning and Weaving Mills, the CESTAT was not correct in their finding that payment of differential duty before issuance of show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the Section would be twenty-five percent of the duty so determined. 19. In the subject case, inspection was conducted on 19th August, 2000. The assessee paid the differential duty on 22nd August, 2000. The show cause notice was issued only on 20th February, 2004. In spite of payment of the entire duty amount even before issuance of show cause notice, and in fact within three days of inspection, the Original Authority imposed penalty equa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
