9911796707
TMI Blog2017 (4) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the assessee. 3. The relevant facts are as follows. On 04.07.2008, the DGCEI searched the appellant's premises. On 04.07.2008 itself, the appellant paid duty amounting to Rs. 5,22,759/-. The appellant contends that this was the amount indicated by the authorities during the search as being payable by the appellant. On 05.10.2009, the respondent issued a notice calling upon the appellant to show cause as to why the appellant ought not to be liable to pay duty amounting to Rs. 6,00,247/-. On 08.08.2010, the Commissioner (Appeals) directed the appellant to deposit the balance duty and pay the penalty as pre-deposit. On 16.09.2010, the appellant deposited the balance duty of Rs. 77,498/-. On 30.09.2013, the Commissioner (Appeals) dismissed the appellant's appeal and on 22.01.2016, the Tribunal, by the impugned order, dismissed the appellant's appeal. The Tribunal denied the appellant the benefit of reduced penalty. The appellant deposited 25% towards penalty in instalments of Rs. 60,000/- and Rs. 90,086/- on 22.09.2016 and 04.01.2017, respectively. 4. Section 11AC of the Act reads as under:- "11AC. Penalty for short-levy or non-levy etc., in certain cases: Where any duty of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om such person." Re: Question No.1: 5. The imposition of the duty is not challenged. The only question is whether the appellant is liable to pay the penalty and, if so, whether the appellant is liable to pay the entire penalty or only the penalty on the balance unpaid amount of the duty of excise. Even assuming that appellant paid the duty amounting to Rs. 5,22,759/- on 04.07.2008 as per the instructions of the respondents, it would make no difference. The fact is that the adjudicating authority, by the order dated 02.03.2010, confirmed the duty amounting to Rs. 6,00,247/-. The appellant deposited the balance duty of Rs. 77,498/- only on 16.09.2010, i.e., beyond the period of 30 days from the date of the order-in-original passed by the adjudicating authority. 6. Under the opening part of section 11AC, the appellant was liable to pay the duty as also the penalty equal to the duty so determined. A party is, however, absolved of the liability to pay the entire penalty and is liable to pay the amount of penalty to the extent of 25% of the duty provided, however, that the duty as determined under sub-section (2) of section 11A and the interest payable thereon is paid within 30 days o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e that being a substantial question of law, the High Court is entitled to raise the same. 11. Mr. Bansal submitted, in the alternative, that the appellant ought to be liable to pay the penalty only in respect and to the extent of the balance unpaid amount of the duty as determined under section 11A(2). Thus, in the present case, according to him, the penalty ought to be paid only in respect of Rs. 77,498/- which is the amount of duty that was not paid till after the expiry of the period of 30 days from the date of communication of the order of the CEO determining the duty of Rs. 6,00,247/-. 12. A consideration of the submission also requires a reference to section 11A which reads as under:- "11A. Recovery of duties not levied or not paid or short-levied or short-paid or erroneously refunded. - (1) When any duty of excise has not been levied or paid or has been short-levied or short-paid or erroneously refunded, whether or not such non-levy or non-payment, short-levy or short payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... geable with the duty, may pay the amount of duty on the basis of his own ascertainment of such duty or on the basis of duty ascertained by a Central Excise Officer before service of notice on him under subsection (1) in respect of the duty, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the duty so paid: Provided that the Central Excise Officer may determine the amount of short payment of duty, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of "one year" referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1. - Nothing contained in this subsection shall apply in a case where the duty was not levied or was not paid or was short-levied or was short-paid or was 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantum of penalty to 25% of the duty determined, if such duty and interest is paid within 30 days from the date of the communication of the order of the Central Excise Officer. The Legislature has granted an incentive of reduced penalty in the event of the duty, as determined under section 11A(2) and the interest payable thereon under section 11AB being paid within 30 days from the date of the communication of the order of the CEO. Under the first proviso where the duty, as determined, and the interest thereon is paid within the period stipulated, the amount of penalty liable to be paid is 25% of the duty so determined. The proviso confers an incentive or a benefit upon the assessee by reducing the quantum of penalty in the event of the assessee paying the duty and interest thereon within the stipulated period. To our mind, the words "such duty as determined" and the words "the interest payable thereon" refer to the entire duty determined and the entire interest payable and not to just a part thereof. 15. The plain language of the first proviso militates against Mr. Bansal's submission. The concession of a reduced quantum of penalty is only where the duty as determined and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as to facilitate the recovery of duty. To the benefit granted to the assessee is the corresponding benefit to the Revenue. The safeguard can be in different ways. Firstly, it ensures a trouble-free recovery of the duty and interest, if ultimately found payable. That is the reason for the incentive. If only a part of the amount due towards duty and interest is paid, it would not serve this purpose. The Revenue would then have to execute the order for the balance amount due. The time, effort and expense in recovering a part may well be the same as the time, effort and expense in recovering the whole. This purpose for the incentive would then be defeated. 18. The injustice caused by a wrong determination is righted by the third proviso under which the reduced duty determined to be payable is to be taken into account for the purpose of section 11AC which would also include the first proviso. Fairness, therefore, is established. No prejudice, therefore, is caused to the assessee. If the assessee wishes to speculate as to the outcome of the further proceedings, he must do so at his own risk. 19. To reiterate, the first proviso grants an assessee a concession, namely, a reduced penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
