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Commissioner of Central Excise Versus Customs, Excise and Service Tax Appellate Tribunal and M/s. HCL Peripherals

2015 (5) TMI 245 - MADRAS HIGH COURT

Penalty u/s 11AC - Interest u/s 11AB - Discretion of Tribunal to impose penalty and interest - Held that:- Insofar as the issue relating to the imposition of penalty under Section 11AC of the Central Excise Act is concerned, if tax is paid before issuance of show cause notice under the provisions of the Finance Act, 1994, the said issue now stands resolved by a Larger Bench decision of the Supreme Court in Union of India and others - Vs - Dharamendra Textile Processors & Ors. [2008 (9) TMI 52 - .....

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tified is imposing interest is sustainable. Further, there is no escapement for the assessee from payment of interest under Section 11AB of the Act, even though the assessee had paid the duty prior to issuance of show cause notice. Accordingly, the order of the Tribunal deleting the interest levied under Section 11AB of the Central Excise Act is also liable to be set aside. - no hesitation to hold that interest and penalty are imposable and there is no discretionary power vested with the authori .....

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t, the Revenue is before this Court challenging the said order by filing the present appeal. This Court, vide order dated 30.04.09, while admitting the appeal, framed the following substantial questions of law for consideration:- 1) Whether the first respondent is justified in observing that according to settled law, neither any interest on duty can be levied under Section 11 AB nor any penalty can be imposed under Section 11 AC, where the duty was paid prior to the issuance of show cause notice .....

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#8377; 3,19,863/= in addition to imposition of interest under Section 11AB and penalty under Section 11AC of the Act equal to the duty payable under the Central Excise Act and a further penalty of ₹ 30,000/= under Rule 25 of the Central Excise Rules, 2002 was imposed. 3. Aggrieved against the said adjudication order, the assessee preferred appeal to the Commissioner (Appeals), who upheld the demand of duty, but set aside the demand of interest and penalty by following the judgments of the .....

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set of document as also the decisions relied on by the learned counsel for the parties. 5. Insofar as the issue relating to the imposition of penalty under Section 11AC of the Central Excise Act is concerned, if tax is paid before issuance of show cause notice under the provisions of the Finance Act, 1994, the said issue now stands resolved by a Larger Bench decision of the Supreme Court in Union of India and others - Vs - Dharamendra Textile Processors & Ors. 2008 (231) ELT 3 (SC), wherein .....

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lar indication has been given. 27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (Supra) has analysed the legal position in the correct perspectives. The reference is answered...." 6. Similar view was taken by the Supreme Court in Union of India v. Rajasthan Spinning & Weaving Mills, 2009 (238) ELT 3 (SC). It is apposite to r .....

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tion 11A. That is what Dharamendra Textile decides. 24. It must, however, be made clear that what is stated above in regard to the decision in Dharamendra Textile is only in so far as Section 11AC is concerned. We make no observations (as a matter of fact there is no occasion for it!) with regard to the several other statutory provisions that came up for consideration in that decision. 25. In the light of the discussion made above it is evident that in both the appeals, orders were passed by the .....

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