TMI Blog2019 (6) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... here any discussion about the same while confirming, in the Order-in-Original. Hence, the above penalty is liable to be set aside - penalty under Section 11AC could be imposed only when the conditions mentioned in Section 11AC exists - there is absolutely nothing on record to suggest any suppression, fraud, etc. for which reason duty of excise was not paid or short paid, etc., and therefore, I have to only assume that the conditions are not satisfied in this case. Penalty under Rule 26 on Shri V. Satish, Incharge - HELD THAT:- Though penalty is imposed but the statutory requirements of serving the order on him is not complied with and thus, the said appellant has not been served with the reasons and the order whereby a demand is raised against him. Hence, even though an order imposing penalty remains on paper, in the absence of communication of the same, the order cannot be enforced - order cannot sustain. Appeal allowed in part. - Appeal No. E/40007, 40021/2018 - Final Order No. 40585-40586/2019 - Dated:- 22-3-2019 - Shri P. Dinesha, Member (Judicial) Shri V. Ravindran, Advocate for the Appellant Shri Shri L. Nandakumar, AC (AR) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal No. 224 225/2015 dated 12.08.2015 has rejected both the appeals against which, the present appeals have been filed before this forum. 4. Today when the matter was taken up for hearing, Ld. Advocate Shri V. Ravindran, appeared for the assessee and Ld. DR, Shri L. Nandakumar appeared for the Revenue. I have considered the rival contentions and have gone through various documents referred to which are placed in the appeal paper book. 5.1 The assessee is challenging 1) the validity of SCN, 2) the impugned demand being time barred and 3) against the penalty levied under Section 11 AC in the hands of M/s. Agarwal Pipes and penalty under Rule 26 in the hands of Shri V. Satish. It is the case of the assessee that it had paid the entire duty much before the issuance of SCN and therefore claims that no SCN should have been issued. Ld. Advocate for the above proposition relies on the following case laws:- i) CCE, Bang-I Vs. Geneva Fine Punch Enclosues Ltd. 2011 (267) ELT 481 (Kar) ii) L. Madanlal Aluminium Ltd. Vs. CCE, Kolkatta-II 2018 (7) TMI 252 (Tri.-Kol.) iii) RKE Technologies Vs. CCE ST, Visakapatt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Satish appeared before the Superintendent along with duly authorization letter which fact was not denied. Therefore, the contention of the Ld. DR that the order was served as per request on the authorized person is required to be accepted, but the fact remains that the same was never served on the individual who was also saddled with penalty. 7.3 With regard to levy of penalty under Section 11AC of the Act, I do not find any allegation as to suppression, fraud, etc. either in the SCN while proposing the penalty or is there any discussion about the same while confirming, in the Order-in-Original. Hence, the above penalty is liable to be set aside following the observations/findings of the Hon ble Supreme Court in the case of UOI Vs. Rajasthan Spinning Weaving Mills 2009 (238) ELT 3 (S.C) and the relevant observations are as follows:- 17. The main body of Section 11AC lays down the conditions and circumstances that would attract penalty and the various provisos enumerate the conditions, subject to which and the extent to which the penalty may be reduced. 18. One cannot fail to notice that both the proviso to sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision, as follows : 2. A Division Bench of this Court has referred the controversy involved in these appeals to a larger Bench doubting the correctness of the view expressed in Dilip N. Shroff v. Joint Commissioner of Income Tax, Mumbai Anr. [2007 (8) SCALE 304]. The question which arises for determination in all these appeals is whether Section 11AC of the Central Excise Act, 1944 (in short the Act ) inserted by Finance Act, 1996 with the intention of imposing mandatory penalty on persons who evaded payment of tax should be read to contain mens rea as an essential ingredient and whether there is a scope for levying penalty below the prescribed minimum. Before the Division Bench, stand of the revenue was that said section should be read as penalty for statutory offence and the authority imposing penalty has no discretion in the matter of imposition of penalty and the adjudicating authority in such cases was duty bound to impose penalty equal to the duties so determined. The assessee on the other hand referred to Section 271(1)(c) of the Income Tax Act, 1961 (in short the IT Act ) taking the stand that Section 11AC of the Act is identically worded and in a given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom the extended period of limitation permissible under Section 11A of the Act. It is in essence submitted that the penalty is for statutory offence. It is pointed out that the proviso to Section 11A deals with the time for initiation of action. Section 11AC is only a mechanism for computation and the quantum of penalty. It is stated that the consequences of fraud etc. relate to the extended period of limitation and the onus is on the revenue to establish that the extended period of limitation is applicable. Once that hurdle is crossed by the revenue, the assessee is exposed to penalty and the quantum of penalty is fixed. It is pointed out that even if in some statues mens rea is specifically provided for, so is the limit or imposition of penalty, that is the maximum fixed or the quantum has to be between two limits fixed. In the cases at hand, there is no variable and, therefore, no discretion. It is pointed out that prior to insertion of Section 11AC, Rule 173Q was in vogue in which no mens rea was provided for. It only stated which he knows or has reason to believe . The said clause referred to wilful action. According to learned counsel what was inferentially provided in some ..... X X X X Extracts X X X X X X X X Extracts X X X X
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