TMI Blog2017 (3) TMI 1285X X X X Extracts X X X X X X X X Extracts X X X X ..... e, to bear in mind that the concession granted under the first proviso to section 11AC is to a person who has been guilty of fraud, collusion, etc - we are not inclined to take the view in favour of the assessee in a case under section 11AC for it involves an assessee who has been found guilty of fraud, collusion, etc - decided against assessee. Appeal dismissed - decided against assessee. - Central Excise Appeal No.47 of 2016 (O&M) - - - Dated:- 14-3-2017 - MR. S.J.VAZIFDAR AND MR. ANUPINDER SINGH GREWAL, JJ. For The Appellant : Mr. Jagmohan Bansal, Advocate For The Mr. Sourabh Goel, Advocate S.J. VAZIFDAR, CHIEF JUSTICE : This is an appeal under section 35G of the Central Excise Act, 1944 (hereafter referred to as the Act ) against the order of the Customs Excise and Service Tax Appellate Tribunal dismissing the appellant s appeal. 2. The appeal is admitted on the following substantial questions of law raised by the appellant:- (i) Whether the appellant was entitled to the benefit of payment of only 25% of the penalty? (ii) Whether an assessee is liable to pay penalty only to the extent of the balance unpaid amount of the duty determined under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid within the period of thirty days referred to in that proviso: Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, 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 (Appeal), 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 penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect. Explanation:- for the removal of doubts, it is hereby declared that (1) the provisions of this section shall also apply to cases in which the order determining the duty under sub-section (2) of section 11A relates to notices issued prior to the date on which the Finance Act, 2000 receives the assent of the Present; (2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the 2nd proviso and there was no opportunity for the dealer- respondent to deposit 25% of the amount. Accordingly he challenged the order in appeal where again the demand of penalty equivalent to duty of excise was maintained (although some relief was given regarding personal penalty imposed on Shri Satish Kumar, Managing Director). It was thereafter that an appeal was filed and the Tribunal reduced the penalty to 25% of the total amount of duty of excise as assessed by the concerned officer. The Tribunal had primarily placed reliance on a judgement of the Delhi High Court in the case of Malbro Appliances (Private) Ltd. (supra) . 8. The judgment comes to the appellant s assistance only in respect of the second proviso but not the first proviso in view of the appellant not having complied with the conditions precedent of the first proviso, namely, the payment of the duty and interest determined under section 11A(2) and Section 11AB, respectively, within 30 days of the communication of the order of the adjudicating authority. The first Proviso not having been complied with, the appellant is not entitled to the benefit of the second Proviso. Thus, the appellant is not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. (2) The Central Excise Officer shall, after considering the representation, if any, made by the person on whom notice is served under sub-section (1), determine the amount of duty of excise due from such person (not being in excess of the amount specified in the notice) and thereupon such person shall pay the amount so determined. (2A) Where any notice has been served on a person under sub-section (1), the Central Excise Officer, - (a) in case any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of fraud, collusion or any wilful 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 or has been short-levied or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid or has been short-levied or short-paid - (A) where under the rules made under this Act a periodical return, showing particulars of the duty paid on the excisable goods removed during the period to which the said return relates, is to be filed by a manufacturer or a producer or a licensee of a warehouse, as the case may be, the date on which such return is so filed; (B) where no periodical return as aforesaid is filed, the last date on which such return is to be filed under the said rules; (C) in any other case, the date on which the duty is to be paid under this Act or the rules made thereunder; (b) in a case where duty of excise is provisionally assessed under this Act or the rules made thereunder, the date of adjustment of duty after the final assessment thereof; (c) in the case of excisable goods on which duty of excise has been erroneously refunded, the date of such refund. 13. Under section 11AC, where any duty of excise has not been paid or has been short-paid, etc., the person who is liable to pay the duty, as determined under sub-section(2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined. Thus, the penalty is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d proviso. In the third proviso, where the duty determined to be payable is reduced by the Commissioner (Appeals), the Appellate Tribunal or the Court, it is the duty, as reduced, that must be taken into account for the purpose of section 11AC. In other words, for the purpose of section 11AC, which includes the provisos thereto, the duty determined by the final order is to be taken into account. Thus, even for the purpose of the first proviso, the duty determined refers to the duty determined not by the adjudicating authority but by the order that attains finality, be it the order of the Commissioner (Appeals), the Appellate Tribunal or the Court. Whether the third proviso is substantive or only clarificatory of the first proviso is immaterial. Where the Legislature intended providing an exception or clarifying a provision it did so specifically. There is nothing in section 11AC that entitles the assessee to the benefit of the reduced quantum of penalty, if only a part of the duty, as determined, and the interest payable thereon is paid. 17. The reason for this is obvious. Absent the first proviso where the ingredients of section 11AC exist, the assessee is liable to pay a penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with intent to evade payment of duty differently from cases where the duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded otherwise than for such reasons. For instance, in section 11A, a notice to show cause why the assessee should not pay the amount specified in the notice is to be served within one year from the relevant date in normal cases whereas it is to be served within five years in cases of fraud, collusion or any wilful 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. Further, the time granted to determine the amount due under section 11A, in normal cases, is six months, whereas, it is one year in cases involving fraud, collusion, etc. Further, sub-section (2B) of section 11A provides that where any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person, chargeable with the duty may pay the amount of duty on the basis of his own ascertainment of such duty or on the basis of a duty ascertained by a CEO before service of a notice on him under s ..... 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