TMI Blog2010 (7) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... sable goods cleared by them to the Domestic Tariff Area (DTA) from 10-12-1998 to 25-5-2001. This demand was raised under the proviso to sub-section (1) of Section 11A of the Central Excise Act. The adjudicating authority also appropriated the earlier payment made by the assessee, towards this demand. It also demanded interest on duty under Section 11AB. Further, the adjudicating authority also imposed on the assessee penalty equal to duty under Section 11AC of the Act. Separate penalties of ₹ 25,000/- and ₹ 5,000/- were also imposed on them under Rules 209 and 210, respectively, of the Central Excise Rules, 1944. In an appeal filed by the assessee against the Order-in-Original, the learned Commissioner of Customs (Appeals) only granted the limited relief of reduction of penalties under Rules 209 and 210. The appellate authority upheld the Order-in-Original on all substantive issues. It was against the order of the Commissioner (Appeals) that the present appeal was filed by the assessee. In this appeal, the demand of duty was challenged on the ground of limitation and grounds were also raised against the demand of interest as well as penalties. In the original order pass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the proviso to sub-section (1) of Section 11A of the Central Excise Act for recovery of differential duty from the appellant. The above allegations raised in the show cause notice were upheld by the adjudicating authority and eventually upheld by the first appellate authority and this Tribunal and, consequently, the demand of duty under the proviso ibid stands affirmed. 3. We have heard both sides. Learned Counsel for the appellant submits that the fact that any challenge against the demand of duty on the ground of limitation does not survive today would not ipso facto preclude this Tribunal from considering the question whether the appellant had, in fact, suppressed or misdeclared anything with intent to evade payment of duty, in the context of examining the penalty-related issue arising under Section 11AC and the interest-related issue arising under Section 11AB of the Act. It is submitted that these questions are liable to be examined independently by this Tribunal on the basis of the facts and evidence on record. It is submitted that the appellant had no intent to evade payment of appropriate duty at the time of the DTA clearance inasmuch as they had overtly avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgments are in support of this plea. 4. Learned JDR has opposed the above argument of the learned counsel on the strength of the findings recorded in the Order-in-Original. It is submitted that the mistake of having claimed the benefit of Notifications No. 8/97-C.E. and 13/98-C.E. had been conceded by the appellant under Section 14 of the Central Excise Act and that there was no subsequent retraction whatsoever. Further, the appellant had categorically declared in the relevant invoices that they had not used any imported raw material in the manufacture of the goods cleared to the DTA. In the same invoices, they also claimed the benefit of the aforesaid Notifications and paid duty accordingly. Learned JDR submits that the above declaration was a misdeclaration with intent to evade payment of duty and, further, that the appellant is estopped from contending to the contra inasmuch as the demand of duty raised on them under the proviso to Section 11A(1) of the Act on the very same ground (misdeclaration with intent to evade payment of duty) today stands accepted. Learned JDR has also claimed support from the Hon ble Supreme Court s judgments in the cases of Dharamendra Textiles Proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept the plea raised by the learned counsel that, as the invoices were countersigned by the proper officer of Customs in charge of the EOU, the declarations made therein should be deemed to have been accepted by the department and therefore the EOU cannot be said to have intended to evade payment of appropriate duty on the DTA clearances covered by the invoices. In the present context, the question is whether the relevant fact was suppressed or misdeclared by the appellant with intent to evade payment of duty. Undisputedly, the relevant fact is whether the imported cotton was used in the manufacture of the final product (yarn) cleared to the DTA during the period of dispute. Was this fact suppressed or misdeclared by the appellant with intent to evade payment of duty? It is not in dispute that this fact was found out by the investigating officers of the department. There is nothing on record to indicate that this fact was disclosed to the department at any earlier point of time. Again, it is not in dispute that, in the relevant invoices covering the DTA clearances in question, the EOU had categorically declared that they had not used any imported raw material in the manufacture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Rajasthan Spinning and Weaving Mills (supra). In the latter case, it was also held that any payment of duty prior to show cause notice or thereafter, was immaterial in the context of imposing penalty on an assessee under Section 11AC of the Act. In the present case, the legal requirement for a penalty under Section 11AC has been met by the revenue inasmuch as it has been proved beyond doubt that the appellant suppressed and misdeclared the relevant fact with intent to evade payment of duty. Therefore, in terms of the Apex Court s ruling, there should be a penalty on the appellant and that should be quantitatively equal to the amount of differential duty paid by them. 8. Learned counsel has heavily relied on the Hon ble High Court s judgments in the cases of J.R. Fabrics (P) Ltd. and Exotic Associates (supra). He has also claimed support from yet another High Court decision viz C.C.E. v. Eicher Demm [2010 (252) E.L.T. 519]. In all these cases considered by Hon ble High Courts, the benefit of the first proviso to Section 11AC was given to the assessees in various factual situations. We have already referred to the said proviso, which states that, where the amount of du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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