TMI Blog2014 (11) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty and confiscation. The intention to evade payment of excise duty is to be gathered from the entirety of the circumstances. It is a finding of fact with which the High Court would not ordinarily interfere unless the finding can be assailed on the non-existence of the material available on record - Decided against assessee. - Central Excise Appeal No. 409 of 2009 - - - Dated:- 16-12-2011 - Sunil Ambwani and K.N. Pandey, JJ. Shri Suyash Agarwal, Counsel, for the Appellant. Shri S.P. Kesarwani, SSC, for the Respondent. ORDER We have heard Shri Suyash Agarwal, learned counsel for the appellant. Shri S.P. Kesarwani, Sr. Standing Counsel, Central Excise and Service Tax, Government of India, High Court Allahabad appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considering the reply of the party the Asstt. Commissioner passed an order on 29-9-2006 by which the excess stock of 72.560 M.T. of HSD Bars valued at ₹ 14,79,910/- was placed under seizure and was ordered to be confiscated under Rule 25(1) of the Central Excise Rules, 2002. Since the goods had already been released, the bank guarantee on which they were released was appropriated. A penalty of ₹ 24,150/- was imposed under Section 11AC of the Act read with Rule 25(1) of the Central Excise Rules, 2002. 5. The Commissioner (Appeals) by his order dated 30-5-2007 relying upon Board Circular dated 23-9-1999 and Bhilai Conductors (P) Ltd. v. Commissioner, 2000 (125) E.L.T. 781 held that the confiscation was not sustainable in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contravention of Rule 10, the provisions of Rule 25 will not come into play. He further submits that Circular dated 23-9-1999 does not say that it will not apply to the manufacturer like the appellant company. The excess/shortage arising due to technical reasons such as burning loss and mill tolerance is applicable to the process of manufacture of iron and steel. 9. Shri Suyash Agrawal further submits that it was held in Union of India v. Rajasthan Spinning and Weaving Mills, 2009 (238) E.L.T. 3 (S.C.) that the penalty under Section 11AC is not attracted to every case of non-payment, or short payment of duty. The decision in Dharmendra Textile must be understood to mean that though the application of Section 11AC would depend upon the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra) the Supreme Court held that penalty under Section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty for adopting any of the means mentioned in the Section. Where there is no intention to evade tax, the penalty cannot be levied. In CCE, Calcutta-II v. India Aluminium Co. Ltd. (supra) the Supreme Court following Union of India v. Rajasthan Spinning and Weaving Mills (supra) observed that penalty under Section 11AC can be levied as punishment for an act of deliberate deception with an intention to evade duty. In case of bona fide mistake, the penalty cannot be levied. Similarly in Oudh Sugar Mills Ltd. v. Union of India (supra) the Constitution Bench of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference in appeal under Section 35F of the Act. 12. Shri S.P. Kesarwani submits that initially a plea was advanced of shortage on account of technical parameters like burning loss and mill tolerance applicable to the process of manufacture of iron and steel products. There cannot be a selective burning loss and mill tolerance in the process of manufacture of a particular quality of goods. In the present case 100% variation of 16 MM bars could not be explained on account of burning loss and mill tolerance applicable to the process of manufacture. He submits that the process of manufacture in the case of integrated steel plant for which the Circular dated 23-9-1999 was issued is from the stage of melting of the iron ore, to the manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discretion of the authority is not taken away. The judgment in Dharmendra Textile did not decide that Section 11AC would apply to every case of non-payment or short-payment of duty regarding the condition expressly mentioned in the Section for its application. Though the application of Section 11AC would depend upon the 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 in penalty. Paras 23 and 24 of the judgment is quoted as below :- 23. The decision in Dharmendra Textile must, therefore, be understood to mean that though the application of Section 11AC would depend upon the existence or otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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