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2016 (11) TMI 9 - CESTAT BANGALORE

2016 (11) TMI 9 - CESTAT BANGALORE - TMI - Benefit of reduced penalty u/s 11AC of the Act - payment of penalty within stipulated time - adjustment of excess tax paid towards liability of reduced penalty - The matter has got a long history having gone up and down number of times. It went to Hon’ble High Court of Karnataka three times. It came to this Tribunal also earlier three times. Now it is before us fourth time - Held that: - Since the matter involves verification and cross-checking at the l .....

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cessary documents to the assessee-appellant within one month of receipt of this order - appeal allowed by way of remand. - E/397 & 398/2004-DB - Dated:- 6-10-2016 - Shri S. S. Garg, Judicial Member And Shri Ashok K. Arya, Technical Member Shri G. Shivadass, Advocate For the Appellant Mr. N. Jagadish, AR For the Respondent ORDER Per Ashok K. Arya 1. The appellants viz., M/s. Tilrode Chem Pvt. Ltd. Bangalore and Shri Ram Shah, Managing Director in appellant No.1 company, are originally in appeal a .....

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rnataka three times. It came to this Tribunal also earlier three times. Now it is before us fourth time. The learned advocate for the appellant has given a chronological sketch of the events. After having gone through facts on record and the chronology sketch filed by the learned advocate, the following facts emerge: (i) The show-cause notice (SCN) dated 2.8.2002 was issued to the appellants proposing the demand of duty of Central Excise of ₹ 81,60,716/-. (ii) Against above show-cause noti .....

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ide his de novo Order dated 30.12.2003 reconfirmed the demands as per the earlier Order-in-Original dated 31.3.2003. (v) Against the above de novo order dated 30.12.2003 passed by the Commissioner of Central Excise, the appellant filed appeal before the Tribunal. The Tribunal passed Final order No.1398-1399/2006 dated 30.8.2006 whereunder a total duty of ₹ 20,19,980/- was confirmed and penalty totalling to ₹ 2,51,200/- was imposed. The Tribunal vide this Order No.1398 & 1399/2006 .....

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ibunal s Order dated 30.8.2006, the Commissioner of Central Excise passed Order-in-Original No.6/2007 dated 30.3.2007 confirming duty of ₹ 9,89,248/- and equivalent penalty; an additional amount of ₹ 14,66,025/- was demanded in terms of Section 11D of Central Excise Act. (V-B) In appeal against above Order-in-Original, the Tribunal set aside the above demands of ₹ 9,89,248/- (along with penalty) and of ₹ 14,66,025/- vide its Final Order No.900/2010 dated 16.6.2010 reporte .....

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Hon ble High Court challenging the penalty. The Hon ble High Court by order dated 26.3.2010 in CEA No.43/2007 remanded the matter back to the Tribunal for considering the issue of penalty, directing to reconsider the case on merits by following the judgments of the Supreme Court and relevant provisions of the Excise Act. (vii) On the remand from the Honb le High Court vide its order dated 26.3.2010, the Tribunal passed Final Order No.310-311/2002 whereunder it upheld the order of the Commission .....

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consideration before this Tribunal as per the remand directions of Hon ble High Court s above order dated 6.12.2013. 5. The last proceedings in this matter has been before the Hon ble High Court of Karnataka, where the judgment dated 6.12.2013 (CEA No.57/2012) was passed. This order is very comprehensive one. In order to give more clarity to the background of the case, it is appropriate to quote Para 2 of the said judgment dated 6.12.2013. The Hon ble High Court in para 2 observes as under: 2. T .....

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endant Central Excise formalities. The officials of the respondent conducted search of the premises of the assessee. The statement of various authorised persons was recorded. Based on the said investigation, a show cause notice was issued proposing to demand an amount of ₹ 81,60,716/- on various grounds. The assessee filed its reply rebutting and denying all the allegations in the show cause notice. The Commissioner of Central Excise by order-in-original No.05/2003 BNG.II dated 31.3.2003, .....

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ack to the adjudicating authority to examine the issue afresh and pass appropriate order. After remand, the adjudicating authority rejected the submissions of the assessee and again confirmed the duty along with the interest and penalties. Again appeals were filed. The Tribunal by stay order dated 03.09.2004, directed the assessee to pre-deposit an amount of ₹ 30 lakhs within a period of 3 months. However, the assessee deposited only a sum of ₹ 10 lakhs in two instalments and filed m .....

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and remanded the matter back to the Tribunal to reconsider the issue of penalty in view of the decision of the Hon ble Supreme Court in the case of Union of India vs. Dharamendra Textiles Processors reported in 2008 (231) E>l.T. 3 (S.C.). After such remand the Tribunal heard the parties and dismissed the appeal. The Tribunal was of the view that the contention of the assessee i.e., entitlement of the benefit of reduced penalty as provided in the proviso of Section 11AC is untenable as the Hig .....

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. Whether the assessee is not entitled to the benefit of the proviso to Section 11AC of the Act, if the payment of penalty as determined is paid within the time stipulated therein? 2. Whether the assessee is not entitled to the adjustment of excess tax paid towards liability of reduced penalty? 5.2 The Hon ble High Court in para 7 of the judgment sets aside the Tribunal s order Nos.310 & 311/2012 dated 9.5.2012 and remands the matter to Tribunal for fresh consideration, keeping in mind the o .....

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urt of Karnataka inter alia holds (mentioned in the ORDER part of the judgment) that the substantial questions of law framed (mentioned above) are answered in favour of the assessee-appellant viz. M/s. Tilrode Chem Pvt. Ltd. and against the Revenue. In other words, the Hon ble High Court of Karnataka holds that the assessee-appellant is entitled to the benefit of the proviso to Section 11AC of the Central Excise Act, if the payment of penalty has been paid within the time stipulated therein. The .....

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s payable or no interest is payable, the question of imposing penalty would not arise at all. Penalty is leviable only for non-payment of duty and interest and in terms of the orders of assessment. If the excess paid amount is taken into account, adjusted towards the duty, the question of imposing penalty would also not arise. That factor also should be gone into by the authority and appropriate orders should be passed on the basis of the materials available on record . 5.5 The Hon ble Karnataka .....

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e learned advocate for the appellant, based on the written submissions, inter alia states as follows: i. Net duty liability in the worst scenario is ₹ 20,19,980/-. ii. There has been an excess payment of duty of ₹ 21,96,572/-. iii. There has been an excess payment of ₹ 1,76,592/-. iv. Payment made in 2004 towards pre-deposit is ₹ 10,00,000/-. v. Other payments made is ₹ 12,71,180/-. vi. Net excess payment works out to be ₹ 22,71,180/-. vii. The duty liability .....

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g the duty. Table: Details on Demand and Excess sought to be adjusted 1997-98 1998-99 1999-2000 2000-2001 2001-2002 Total Clandestine removal 2,67,449 3,04,944 2,44,392 3,98,276 40,572 12,55,633 Clearances made to medical shops 1,56,144 80,121 3,54,642 5,90,907 Amount demanded on account of Modvat credit on inputs returned to suppliers 1,45,913 1,45,913 Duty on stelbids tablets destroyed (June 2001) 95,520 95,520 TOTAL 2,67,449 4,61,088 3,24,513 9,94,351 40,572 EXCESS AMOUNTS TO BE ADJUSTED 6,64 .....

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