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2015 (11) TMI 211 - CESTAT MUMBAI

2015 (11) TMI 211 - CESTAT MUMBAI - TMI - Suo moto reversal of credit before issuance of SCN - Interest u/s 11AB - Imposition of penalty - Held that:- It come to the notice regarding the short payment, non payment of duty during the audit of the appellant s record as a result appellant suo moto paid the entire duty and not contesting the same. The Revenue has not issued any show cause notice for demand of duty and appropriation of the amount already paid by the appellant. - under this section du .....

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made, therefore ingredients required under Section 11AC inasmuch as issuance of show cause notice under Section 11A(1) and determination of duty under Section 11A(2) was not carried out by the department, therefore penalty under Section 11AC could not have been imposed. - penalty under Rule 173Q, I find that since the appellant has not paid duty or availed Cenvat Credit wrongly they have contravened provision of Central Excise Rules, therefore, they are liable to penalty under Rule, 173Q, hence .....

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interest as provided under Seciton 11AB at the relevant time - Interest under Section 11AB as confirmed - penalty imposed under Rule 173Q is upheld - However, Penalty under Section 11AC is dropped - Decided partly in favour of assessee. - APPEAL NO. E/1409/09 - Dated:- 4-6-2015 - Mr. Ramesh Nair, Member (Judicial) For the Petitioner : Shri. R. Sundaram, Advocate For the Respondent : Shri. H.M. Dixit, Asstt. Commissioner (A.R.) ORDER Per : Ramesh Nair This appeal is directed against Order-in-Appe .....

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n payment of such duty, the issued as regard the payment of duty attained finality and no show cause notice was issued with regard to short payment of duty. However, show cause notice dated 13/5/2005 was issued proposing only demand and interest on the duty so paid under Section 11AB, penalty under Rule 173Q of Central Excise Act, 1944, read with Rule 25 and under Rule 13 of Cenvat Credit Rules, 2002. Penalty equivalent to amount of duty under Section 11AC. Show cause notice was adjudicated by O .....

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amp; 2002 read with Rule 13 of Cenvat Credit Rules, 2002. Aggrieved by the said order the appellant filed appeal before the Commissioner (Appeals) who vide impugned order upheld the Order-in-Original and rejected the appeal of the appellant therefore the appellant is before me. 3. Shri. R. Sundaram, Ld. Counsel for the appellant submits that since appellant have paid duty on pointing out by the audit officer, voluntarily, without any protest and before issuance of show cause notice, penalty and .....

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d, Shri. H.M. Dixit, Ld. Asstt. Commissioner (A.R.) appearing on behalf of the Revenue reiterates the findings of the impugned order. 5. I have carefully considered the submissions made by both sides and perused the record. 6. It come to the notice regarding the short payment, non payment of duty during the audit of the appellants record as a result appellant suo moto paid the entire duty and not contesting the same. The Revenue has not issued any show cause notice for demand of duty and approp .....

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the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined: 2[Provided that 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 .....

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then, for the purposes of this section, the duty, as reduced or increased, as the case may be, shall be taken into account: Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the Court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent. of the consequential increase of pe .....

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ment prior to the date of communication of the order referred to in the first proviso or the fourth proviso shall be adjusted against the total amount due from such person.] From the plain reading of the above Section, it is provided that penalty under Section 11AC can be imposed on the person who is liable to pay duty which was determined under subsection (2) of Section 11A. The Section 11A(2) is reproduced below: SECTION 11A. Recovery of duties not levied or not paid or short-levied or short-p .....

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with the duty which has not been so levied or paid or which has been so short-levied or short-paid or to whom the refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice; (b) the person chargeable with duty may, before service of notice under clause (a), pay on the basis of, (i) his own ascertainment of such duty; or (ii) duty ascertained by the Central Excise Officer, the amount of duty along with interest payable thereon under sec .....

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ering representation made by the person on whom notice is served under subsection(1). In the present case neither any notice was issued under Section 11A(1) nor Central Excise Officers has determined the duty short paid / not paid under subsection (2) of Section 11A as is evident from the proceedings that no show cause notice under Section 11A(1) was issued nor any adjudication in respect of short payment or non payment of duty has been made, therefore ingredients required under Section 11AC ina .....

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