TMI Blog2016 (9) TMI 934X X X X Extracts X X X X X X X X Extracts X X X X ..... so to be noted that on query from the Department only, the Controller-Legal Metrology, Government of Andhra Pradesh vide letter dated 04-03-2009, clarified that the supplies to APHB is covered by the definition of Institutional consumers; that the sale is not retail and that printing RSP was not required. By this time, the appellant had already paid up the duty liability of ₹ 2,79,330/- along with interest three months earlier, in December, 2008. Yet, the Show Cause Notice was issued only in 18-01-2012. It is also not disputed that there was evident doubt on the applicability of Notification 4/2006 CE. The Honourable Apex Court has consistently held, in a number of land mark judgments, that when all facts were in the knowledge of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No.4/2006 as amended. The appellant was asked to pay the differential duty of ₹ 1,46,910/- (for 2007-08) and ₹ 1,32,420/- (for 2008-09) along with interest, which was paid up on 05-08-2009. 2. Show Cause Notice dated 18-10-2012 was issued to the appellant extended period proposing demand of differential duty of ₹ 2,79,330/- along with interest, appropriation of amounts already paid and also imposition of penalty under Section 11AC of the Act or Rule 25 of Central Excise Rules, 2002. Original adjudicating authority vide the order dated 30-04-2012 confirmed the demand along with interest, appropriated amounts already paid and imposed penalty under Rule 25. However, the adjudicating authority refrained from imposing man ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is very apparent that there is a case involving genuine belief as to applicability of benevolent notification; however, when even a simple doubt arose thereon, we paid entire duty and interest immediately on 04-12-2008 08-12-2008 to prove our bonafide. 5.6 Thus, having complete knowledge before three years so, any attempt to invoke larger period as per first proviso to Section 11A of the Central Excise Act 1944 vide show cause notice dated 18-01-2012 for penalizing, shall totally be against the very scheme of statute and shall not be good in law at all. 5.7 It is very clear from the OIO that ours is not a case of mensrea and Section 11 AC, ibid is certainly not applicable at all. 5.8 In the case of Kalpana Lamps Compo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-imposition of Sec.11AC penalty. Hence the issue involved in the resultant appeal by appellant is limited only to imposability or otherwise of Sec. 11AC penalty. 10. It is seen that the original adjudicating authority has analysed this issue is detail and has arrived at a reasoned finding that the Sec.11AC penalty is not imposable since as per the facts, the appellant has not committed any fraud, collusion etc. The operative portion of the original order is reproduced below for better understanding: As regards proposal of penalty under Section 11AC of the Central Excise Act, 1944 read with Rule 25 of the Central Excise Rules, 2002, I find that penalty under Section 11AC of the Central Excise Act, 1944 is a punishment for an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would come into play only after an order is passed under Section 11A(2) of the Central Excise Act, 1944 with the finding that the escaped duty was the result of deception by the assessee by adopting one of the means as indicated in Section 11AC of the Central Excise Act, 1944. Since I am not holding that there is a presence one of the means as indicated in Section 11AC of the Central Excise Act, 1944, in my findings for demanding the duty, penalty under Section 11AC of the Central Excise Act, 1944, is not imposable in terms of the Honourable Apex Court s ruling in the case of Rajasthan Spinning Mills 11. On the other hand, the reasoning adopted by the Commissioner (Appeal) to reinstate Sec.11AC penalty are flawed. He has not given conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ful suppression. When all facts are before the Department and a party in the belief that affixing of a label makes no difference does not make a declaration, then there would be no wilful mis-declaration or wilful suppression. If the Department felt that the party was not entitled to the benefit of the Notification, it was for the Department to immediately take up the contention that the benefit of the Notification was lost. In this case, as set out hereinabove, all facts were within the knowledge of the Department. Therefore, even if the ratio of Nizam Sugar Factory s case (supra) is applied, there is no justification for invoking the extended period of limitation. It follows that limitation is not available, no penalty can also be im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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