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2016 (9) TMI 934 - CESTAT HYDERABAD

2016 (9) TMI 934 - CESTAT HYDERABAD - TMI - Imposition or otherwise of penalty - Section 11AC of the Act - original adjudicating authority did not imposed the penalty under Section 11 AC on the appellant but in appeal to Commissioner (A), Comm. (A) imposed such penalty - Held that:- the reasoning adopted by the Commissioner (Appeal) to reinstate Sec. 11AC penalty are flawed. He has not given convincing grounds as to how he concludes that the qualifying ingredients for attracting Sec. 11AC have b .....

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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 the Department, or when there was genuine confusion on the leviabili .....

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y respectfully following the ratio set out in the above judgments, I have no hesitation in holding that the impugned order as unsustainable and bad in law. - Decided in favour of appellant - Appeal No. E/22824/2014 - A/30778/2016 - Dated:- 29-7-2016 - Mr. Madhu Mohan Damodhar, Member(Technical) None for the Appellant Shri P.S.Reddy, AR for the Respondent ORDER [ Order Per Madhu Mohan Damodhar ] 1. Brief facts of the case are that the appellants are the manufacturers of Clinker and cement falling .....

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,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 .....

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n which the appeal has been filed can be summarized as follows: 5.1 The proviso to Para 2 of the amended Notification No 4/2006, RSP will not be the basis for determination of rate of duty in a situation as provided also that where the retail sale price of the goods are not required to be declared under the Standards of Weights and Measures (Packaged Commodities) Rules, 1977, and thus not declared, the duty shall be determined as in the case of goods cleared in other than packaged form. 5.2 In t .....

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ire interest immediately by December 2008 itself in the absence of any Show cause notice. 5.5 Under the above mentioned situation, 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 .....

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follows On a careful consideration of the case records and the rival submissions, I find that as rightly contended by the learned Consultant, the demand of ₹ 1,61,079/- was made in a Notice dated 5-4-2000. The Unit had been inspected by the audit parties and the authorities had collected information relating to the irregular credit availed on account of damaged inputs and that on 16-7-1998 the jurisdictional Range Officer had listed out the amounts which had become recoverable from the ass .....

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e adjudicating authority dated 30-04-2012, which inter alia confirmed demand of differential duty of ₹ 2,79,330 with interest thereon, and imposition of penalty of ₹ 70000/- under Rule 25 of the Central Excise Rules, while not imposing penalty under Section 11AC of the Act. Appeal by Department to Commissioner (Appeals) was on limited issue of non-imposition of Sec.11AC penalty. Hence the issue involved in the resultant appeal by appellant is limited only to imposability or otherwise .....

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I find that penalty under Section 11AC of the Central Excise Act, 1944 is a punishment for an act of deliberate deception by the assessee with an intent to evade by adopting one of the means mentioned in the Section 11AC of the Central Excise Act, 1944. In this context I find that in the instant case, the assesssee has immediately paid the short payment, on being pointed out by the departmental officers, leaving no room for any dispute. I find that the assessee has a bonafide belief that the cl .....

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the assessee has not committed any fraud, collusion etc., to drive the benefit of Notification unduly. In this context I find that the Hon ble Supreme Court in the case of Union of India V/s Rajasthan Spinning & Weaving Mills reported in 2009 (238) ELT03SC held at para 18 that in the absence of a finding in the order passed under Section 11A(2) of the Central Excise Act, 1944 to the effect that non-payment of duty is on account of one of the elements mentioned in Section 11A ibid, there woul .....

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944, 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 convincing grounds as to how he concludes that the qualifying ingredients for attracting Sec.11AC have been satisfied, at the same time ignoring the submission .....

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; 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. 12. The Honourable Apex Court has consistently held, in a number of land mark judgments, that when all facts were in the knowledge of the Department, or when there was genuine confusion on the leviability per se etc., penal provisions of Sec.11AC cannot be imposed. F .....

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