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2015 (10) TMI 1837 - CESTAT AHMEDABAD

2015 (10) TMI 1837 - CESTAT AHMEDABAD - TMI - Levy of Penalty under Rule 26 on co-noticee - Adjudicating authority dropped the proceedings initiated by the Show Cause Notice dt.25.01.2012 against the main noticee - Held that:- Person (main noticee) had paid the duty and interest and informed the Department by letter dt.08.02.2011. Thereafter, the impugned Show Cause Notice dt.25.01.2012 was issued to the main noticee and the Appellants herein. The Adjudicating authority had dropped the proceedin .....

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ion of penalty on the co-noticee cannot be sustained for the reason that the notice issued under Section 11A(1) cannot be served.

Penalty on the Appellant was imposed under Rule 26 of Central Excise Rules, 2002. Rule 26 of the said Rules provides any person who acquires possession of, or is in any concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any manner deals with any excisable goods which he knows are liable to confiscation under t .....

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al against the imposition of penalty of ₹ 5 lakhs under Rule 26 of Central Excise Rules, 2002. 2. The learned Advocate on behalf of the Appellant submits that the Adjudicating authority dropped the proceedings initiated by the Show Cause Notice dt.25.01.2012 against the main noticee, the manufacturer of excisable goods by invoking Section 11A(2B) of the Central Excise Act, 1944 and therefore, the imposition of penalty against the co-noticee, Appellant, cannot be sustained. He drew the atte .....

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arged the duty liability alongwith interest and penalty equal to 25% duty in terms of Section 11A(1A) of the Central Excise Act, 1944 the proceedings against the co-noticee cannot be held to be conclusive in nature. He also relied upon the decision of the Tribunal in the case of Shri Ghanshyamdas C Goyal Vs CCE Aurangabad 2015-TIOL-756-CESTAT-MUM. He further submits that it is not a case of Section 11A (2B) of the Act, as the Show Cause Notice was issued for the demand of duty more than ₹ .....

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assessee in respect of duty and interest paid by them and informed to the Department vide letter dt.08.02.2011. According to proviso to the said sub-section, no penalty under any of the provisions of the Central Excise Act or rules made thereunder can be imposed on the said assessee in respect of the said duty and interest paid thereon. 33. As regards the proposal in the show cause notice proposing penalty under Rule 26 of the Central Excise Rules, 2002 on the said principal, I find that the rea .....

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ere they were availing exemption under Notification No.49/2003-CE, as amended by Notification No.76/2003-CE dt.05.11.2003, were liable for confiscation. They acquired possession of such goods and acted by transporting depositing, keeping and selling such goods, thereby they have rendered themselves for penalty under Rule 26 of the Central Excise Rules, 2002. 34. In view of the above discussion and findings, I pass the following order:- ORDER The proceedings initiated against M/s Banco Aluminum L .....

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efunded (1) When any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, whether or not such non-levy or non-payment, short levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty or on valuation of excisable goods under any other provisions of this Act or the rules made thereunder, a Central Excise Officer may, within one year from the relevant da .....

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ion of any of the provisions of this Act or the rules made thereunder with intent to evade payment of duty, by such person or his agent, to whom a notice is served under the proviso to sub-section (1) by the Central Excise Officer, may pay duty in full or in part as may be accepted by him, and the interest payable thereon under Section 11AB and penalty equal to 25% of the duty specified in the notice or the duty so accepted by such person within 30 days of the receipt of notice. (2) The Central .....

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en shot levied or short paid or erroneously refunded, by reason of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, where it is possible to do so, shall determine the amount of such duty, within a period of one year, and (b) in any other case, where it is possible to do so, shall determine the amount of duty of excise which has not been levied or paid .....

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im under sub-section (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid. 6. On plain reading of the Section 11A(1) of the said Act, it is clear that the Central Excise Officer is empowered to serve a notice on the person chargeable with the duty, which has not been levied or paid or which has been short levied or short paid etc. Sub-sectio .....

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Excise Officers shall determine the amount of duty. Sub-section (2B) of the Section 11A of the Act which is the subject matter of the present appeal, provides a different situation. In terms of Section 11A(2B) of the Act, if the person on his own ascertainment or on the basis of duty ascertained by the Central Excise officers, paid the amount of duty before service of the notice under sub-section (1) of the said Section and informed the Central Excise officers after payment, in writing, no noti .....

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