TMI Blog2019 (12) TMI 1017X X X X Extracts X X X X X X X X Extracts X X X X ..... iew that independent texturizer, is a person (legal or natural) who procures the partially oriented yarn from the open market and then clears the texturized yarn after texturizing the same. We are holding this view because the phrase independent texturizer used in the notification is followed by the phrase who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters , which implies that he has no facility to produce the partially oriented yarn. Thus procurement of the partially oriented yarn which is the raw material to start with for him can be only by way of purchase. Undisputedly KSF(PUY) and KSF (POY) are having common sales tax registration and PAN and are proprietorship concerns of M/s CEL, before and after bifurcation. The phrase interpreted was his factory i.e. the factory of manufacturer. In our view said decision is distinguishable, in view of the use of word independent to qualify the texturizer , in the notification under consideration. In our view if the phrase is considered as a whole then we find that word independent qualifies the texturizer and not the factory. So if the tex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lants in the present order. Whether interest on the demand made can be sustained? - HELD THAT:- This is a civil liability of the assessee, who has retained the amount of public exchequer with himself and which ought to have gone in the pockets of the Central Government much earlier - Upon reading Section 11AB together with Sections 11A and 11AA, the interest on the duty evaded is payable and the same is compulsory and even though the evasion of duty is not mala fide or intentional. Whether penalties are imposable on appellant? - HELD THAT:- The order of Commissioner to the extent of imposing penalties under Rule 173Q of the Central Excise Rules, 1944 or Rule 25 of the Central Excise Rule 2002 as the case may be read with Section 11AC of the Central Excise Act, 1944 upheld - However the quantum of penalty needs to be redetermined after determination of actual duty evaded by the appellants. Whether penalties are imposable on four functionaries in the unit? - HELD THAT:- In view of the specific finding recorded by the Commissioner, to the effect that the four functionaries were instrumental and in knowledge of the entire fa ade being created to evade payment of duty, the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Five Hundred and Ninety Five only) on them under Rule 25 of Central Excise Rules, 2002 read with section 11AC of Central Excise Act, 1944. 5) I order recovery of interest at appropriate rate on the duty confirmed at Sr No (3) above, from them under the provision of Section 11AB of the Central Excise Act, 1944. (B) In respect of Show Cause notices mentioned at (Sr No 1 to 32) of Table at Para No 12, covering the period from April 2001 to June 2001:- 1) I hereby reject the declaration No 1/2000-01 dated 8.5.2000 filed under Rule 173B of the Central Excise Rules, 1944 by M/s KSF (PYU) 2) I hereby disallow the exemption benefit under notification 6/2000-CE dated 1.3.2000 as claimed in declaration No 1/2000-01 dated 8.5.2000 under Rule 173B of the Central Excise Rules, 1944 by M/s KSF (PYU) 3) I hereby confirm the demand of Central Excise duty totally amounting to ₹ 23,74,27,559/- (Rupees Twenty Three Crore Seventy Four Lakhs Twenty Seven Thousand Five Hundred and Fifty Nine only) for the period April 2001 to June 2001 and order the recovery from them under Section 11A of Central Excise Act, 1944. 4) I impose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oriented yarn 9POY) and different types of processed yarn (PY) falling under Chapter sub heading 5402.32, 5402.43, 5402.52 of Central Excise Tariff Act, 1985 respectively in the single composite plant. They availed MODVAT/ CENVAT Credit and paid the Central Excise duty advalorem. 2.2 The requested for bifurcation of their existing unit into two units for implementing, product management concept policy and requested separate Registration on the basis of information provided by them and as requested the existing manufactory of appellant at C-51, MIDC, Mahad registered under Central Excise, was altered by constructing a suitable compound wall and in/ out gate. The existing Central Excise Registration was amended was amended in name of KSF (PYU) and a new Central Excise Registration was given to KSF (POY) with effect from 26.04.2000. 2.3 M/s KSF (PYU) filed a classification declaration as per Rule 173B of the Central Excise Rules, 1994 claiming the benefit of exemption under Notification No 6/2000-CE dated 1.03.2000 (Sr No 114) as per which `the duty on texturized yarn classifiable under Heading No 5402.42 was specific rate, subject to condition that the manufactur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specific rate in terms of notification 6/2000-CE dated 01.03.2000. Thus fraudulent intentions to evade payment of duty, by claiming themselves to be independent texturizer was quite evident. 2.7 The fact that artificial bifurcation done was only on paper and unit continue working as one composite unit, is evident from the following: Prior to 26.04.2000.for Sales Tax Department, KSF (Prop CEL) Mahad was functioning as single unit engaged in manufacturing of POY and Processed Yarn. Accordingly, it was registered with the Sales Tax Department in the same name and for the place of business C-61 MIDC Mahad . Even after bifurcation into two units, no change was incorporated in the sales tax registration. Since these two units were working under Packaged Scheme of Incentive , separate registration was needed for each unit but was never taken. Thus the manufacturing site at C-61 MIDC Mahad, continued to function as KSF even after bifurcation. They also filing monthly sales tax returns in name of KSF only through CEL, Pune. For SICOM Ltd (State Investment Corporation of Maharashtra) which had issued them eligibility certificate for tax exemption of ₹ 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices as detailed below were issued to the appellants, demanding duty short paid by them. S No SCN No Date Amount Period 1 V/Adj (SCN) 15503/M VII/01 23.11.01 9324997 01.04.01 to 05.04.01 2 V/Adj (SCN) 15534/2001/MVII 27.12.01 9335519 06.04.01 to 10.04.01 3 V/Adj (SCN) 15535/2001/MVII 27.12.01 8706184 11.04.01 to 13.04.01 4 V/Adj (SCN) 15536/2001/MVII 27.12.01 7349010 14.04.01 to 16.04.01 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 V/Adj (SCN) 1589/2002-03 28.05.02 5506674 17.05.01 to 18.05.01 17 V/Adj (SCN) 1590/2002-03 28.05.02 7821409 19.05.01 to 23.05.01 18 V/Adj (SCN) 1591/2002-03 28.05.02 7130691 23.05.01 to 24.05.01 19 V/Adj (SCN) 1592/2002-03 28.05.02 5398095 25.05.01 to 31.05.01 20 V/Adj (SCN) 1595/2002-03 29.05.02 2932484 01.06.01 to 02.06.01 21 V/Adj (SCN) 1596/2002-03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29.05.02 7700113 29.06.01 to 30.06.01 33 V/Adj (SCN) 15170/2002-03 01.08.02 677336512 July 01 to Mar 02 34 V/Adj (SCN) 1568/2002-03 02.05.03 792483678 Apr 02 to Dec 02 35 V/Adj (SCN) 15324/Raigad/0304 06.02.04 203049616 Jan 03 to Mar 03 2.9 All the show cause notices have been adjudicated by the Commissioner as per the impugned order referred in para 1, supra. 2.10 Aggrieved by the impugned order of Commissioner, Appellants have filed these appeals. 3.1 In their appeal appellants have challenged the impugned order stating as follows:- i. Two separate registrations after Bifurcation of the unit granted on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed on them cannot be justified. 4.1 We have heard Shri D B Shroff, Sr. Advocate, Shri Prakash Shah, Shri Prasad Paranjape and Shri Mohit Raval, Advocates for the Appellants and Shri V K Singh, Special Counsel for the revenue. Both the sides have also filed written submissions which have been taken on record. 4.2 In their submissions and during the course of arguments, learned advocates appearing on behalf of Appellants submitted while reiterating the submissions made in appeal as follows:- The issue of bifurcation of their one factory into to factories has already been adjudicated by the Hon ble Tribunal in their favour and hence is not res-integra. This fact is not disputed by the revenue. In the said order the referred to para 6, wherein it has been held that two premises clearly constitute two totally separate factories which have been registered separately; The contention that Appellant had facility of producing POY, and, therefore they are not entitled to the benefit of the Notification No 6/2000-CE also proceeds on the basis that there was one factory which has been negatived. The contentions raised for holding that the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest under Section 11AB or penalty under Section 11AC can be imposed. Quantification of duty as done by the commissioner cannot be sustained. The assessable value should be determined by the commissioner after allowing the admissible deductions. While Commissioner has taken the gross sales value from the certificate of Chartered Accountant submitted by them, he has ignore the admissible deductions in the same certificate for arriving at the assessable value. As per the certificate of the chartered Accountant the average assessable value was as follows: 1.04.2000 to 31.3.2001 ₹ 89.85 per Kg 1.04.2001 to 31.03.2002 ₹ 85.53 per kgs 1.04.2002 to 31.03.2003 ₹ 81.51 per kgs. Commissioner has determined the assessable value for the year 2001-02 by adopting highest rate of ₹ 225/- per kg from the sales policy of Appellant and thereafter added ₹ 40/- per kg towards special shed. Assessable value for year 2002-03 was also determined on similar lines. This method of determination of assessable value is not tenable, as the assumption made by the Commissioner that all the yarn was clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns. This notification was rescinded by Notification No 10/2001- CE, but exemption continued as per Sr No 126 131 in Notification No 3/2001-CE dated 01.03.2001. This notification got rescinded vide Notification No 13/2002-CE dated 01.03.2002, again the exemption continued as per S No 121 126 of Notification No 6/2002-CE dated 01.03.2002. The conditions for allowing the exemption remained unchanged in the these notifications. At the time of issuance of exemption Notification No 6/2000-CE, Central Government has vide Budget Changes 2000-01, under heading Man Made Filaments (Chapter 54), Para 3 stated, that this exemption was issued to provide concessional duty to independent texturizers who do not have facility to manufacture partially oriented yarn of polyester in their factory. M/s KSF (Prop CEL) Appellants, requested for bifurcation of their existing plant into two parts by erecting a wall between two section and on 16.03.2000 requested for grant of two separate registrations in name of KSF (PYU) and other in name of KSF (POY). Accordingly on 26.04.2000 the existing registration was changed in the name of KSF (PYU) and one more registration given under name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 2(e) of the Central Excise Act, 1944. The terms premises precincts , used in Section 2(e) have not been defined . However in case of Grauer and Weil (India) Ltd [1994 (74) ELT 481 (SC)], Hon ble Apex Court while interpreting the phrase any premises including the precincts thereof used in section 2(m) of Factories Act, 1948, held that was wide enough to include all buildings with its surroundings which form part of one unit. Then court went on to hold that two units belonging to same company, situated on a common plot of land, goods manufactured by one unit forming input of the other unit and their removal from first unit shows as for captive consumption , having common power and water connections, common payments for these facilities, common payments to workers, common delivery challans and common stock register and store keeper - Both units treatable as one `factory . Reliance is also placed on the decisions as follows, wherein it has been held in similar circumstances that there were not two but a single common factory. Swadeshi Dyeing Bleaching Mills (P) Ltd [1989 (41) ELT 224 (BOM)] Mukerian Papers Ltd [2015 (330) ELT 533 (T-Del)] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation, valuation, interest and penalty. 5.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments on appeal. 5.2 Following issues need to be determined by us in the present appeals: i. Whether the benefit of exemption under Notification No 6/2000-CE dated 1.03.2000 is admissible to the appellant post 26.04.2000. ii. Valuation of the goods cleared by the appellant. iii. Whether appellants have mis-declared, mis-stated to wrongly avail the benefit of exemption notification. iv. Whether interest on the demand made can be sustained. v. Whether penalties are imposable on appellant. vi. Whether penalties are imposable on four functionaries in the unit. 5.3 Whether the benefit of exemption under Notification No 6/2000-CE dated 1.03.2000 is admissible to the appellant post 26.04.2000, the date from which they obtained two Central Excise Registrations by bifurcating their existing facility into two units. 5.3.1 Relevant excerpts from the Notification No 6/2000-CE dated 01.03.2000 are reproduced below: In exercise of the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yarn (including draw twisted and draw wound yarn) of polyesters manufactured by an independent texturiser who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters falling under sub-heading No. 5402.42 ₹ 2.50 per kg. Nil 17A 134 5402.31, 5402.32, 5402.39, 5402.41, 5402.42, 5402.43, 5402.49, 5402.51, 5402.52, 5402.59, 5402.61, 5402.62, 5402.69, 5403.20, 5403.31, 5403.32, 5403.33, 5403.39 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has not been defined in the said notification. As per the appellants because the registrant who has claimed the benefit of the exemption, do not have facility in the same factory to produce the Partially Oriented Yarn, he will qualify as an independent texturizer for the purpose of said notification. They have further referred to the definition of Independent Texturizer as per explanation to sub-rule 3(b) of Rule 57AG of Central Excise Rules, 1944, which read as under: Explanation: For the purposes of this sub rule, independent texturizer means a manufacturer engaged in the manufacture of texturized yarn (including draw-twisted or draw-wound yarn) of polyesters falling under heading No 5402 of the said First Schedule, and who does not have the facility in his factory (including plant and machinery) for manufacture of partially oriented yarn of polyesters falling under sub-heading No 5402.42 of the said First Schedule. The explanation referred by the appellant states the same as has been stated in the notification and do not add any value to the argument of the appellants. 5.3.3 The entire case of the appellant hinges around the interpretation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted. The letterhead of the erstwhile KSF itself states M/s. Konkan Synthetic Fibres (Prop. CEL) . The application states that M/s. KSF are a Division of M/s. Century Enka Ltd. Further application for L. 4 licence in 1989 was made by erstwhile M/s. KSF and in 1992 when Central Excise registration was required instead of licence, it was the erstwhile KSF that made the application and was also granted Central Excise Registration. At no point of time did the Excise Authorities raise the issue that a Division of a company could not make such application. It is also to be noted that the respondents company had given Power of Authority to the Factory Manager Shri D.B. Roongtha to enable to apply for all licences etc. for Century Enka Ltd. 7 . The two premises in question clearly constitute two totally separate factories which have been separately registered. In the case of CCE v. Broach Textile Mills Ltd. [1998 (79) ECR 411], the Tribunal has held that the registration cannot be denied to separately registered premises, which function as two different factories. The contention of the Revenue that the respondents put up a fence for creating the new factory for the sole ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee was not in a position to dispute this legal position . The judgment in Panchmukhi (supra) has little precedential value. The point whether Dharmada involved in Panchmukhi (supra) and the surcharge held as price in Tata Iron Steel (supra) were identical and liable to be included in the transaction value passed sub silentio. Salmond on Jurisprudence Twelfth Edition p.15h states that a decision held is not binding since it was decided without argument, without reference to the crucial words of the rule, and without any citation of authority , therefore, would not be followed. The author also states that precedents sub silentio and without arguments are of no moment. This is enough reason for not treating the decision in Panchmukhi (supra) as a binding precedent. 5.3.4 Now coming to the phrase independent texturizer who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters . In case of Dhampur Sugar Mills [2001 (129) ELT 73 (T-Del)], following was held: 4. We have considered the submissions of both the sides. As per Section 2(e) of the Central Excise Act fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Apex Court as reported at [2007 (216) ELT A23 (SC)]. As per the ratio laid down by this decision, the concept of factory under Central Excise has been delinked from the Registration granted. It has been held that there can be more than one registration within the same factory. Counsel for the Appellant submitted that Apex Court in the case of Rollatainers, has taken a contrary view. Hon ble Apex Court has in case of Rollatainers, held as follows: 8 . Simply because both the factories are in the same premises that does not lead to the inference that both the factories are one and the same. In the present case, from the facts it is apparent that there is no commonality of the purpose, both the factories have a separate entrance, there is a passage in between and they are not complimentary to each nor they are subsidiary to each other. The end product is also different, one manufactures duplex board and the other manufactures paper. They are separately registered with the Central Excise Department. The staff is separate, their management is separate. It is also not the case of revenue that end product of one factory is raw material for the other factory. From the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s after bifurcation. xiii. KSF (POY) supplies entire production of POY (Heading No 5402.42) to KSF (PYU) section which was the same position even prior to bifurcation. 5.3.5 Thus the interdependence of the two units as the entire raw material i.e. POY for KSF (PYU) was being supplied from KSF (POY), completely distinguishes the present case from that of Rollatainers. In case of Grauer and Weil [1994 (74) ELT 481 (SC)] Hon ble Apex Court held as follows: 10 . The Tribunal also in its turn, re-appraised the relevant materials and concurred with the finding of the Collector with the following observations : Here, the appellants were engaged in the manufacture of sodium bichromate, a vital input for manufacture of chromic acid and using it as such. How the two activities can be said to be independent of each other passes our comprehension, especially considering the other features of the case, i.e. common water and power connections, common payments for these facilities, common payments to workers, common delivery challans, etc. This is not, therefore, a case in which it can be said that the activities in the chromic acid section were not con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f pulp to the final stage of the end product i.e. paper. The finding is a pure question of fact and is not put in issue by the revenue. That being so, the impugned order does not give rise any question of law. Resultantly, the appeal deserves to be dismissed. We order accordingly with no order as to costs. Similarly the other decisions relied upon by the appellants in case of Bansi Pulp and Paper Mills Pvt Ltd [2014 (306) ELT 650 (T-Mum)]. 5.3.7 Now coming to the phrase independent texturizer used in the Notification No 6/2000-CE, we are of the view that independent texturizer, is a person (legal or natural) who procures the partially oriented yarn from the open market and then clears the texturized yarn after texturizing the same. We are holding this view because the phrase independent texturizer used in the notification is followed by the phrase who does not have the facilities in his factory (including plant and equipment) for producing partially oriented yarn (POY) of polyesters , which implies that he has no facility to produce the partially oriented yarn. Thus procurement of the partially oriented yarn which is the raw material to start with for him c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the benefit of the exemption notification 6/2000-CE and its successor notification will not be admissible to the appellants. 5.4 Valuation of the goods cleared by the appellant 5.4.1 Appellant have in their appeal and during the course of argument challenged the valuation adopted by the Commissioner, for determining the duty short paid by them. Rejecting their plea on valuation, the Commissioner has in his para 44 and 45 of his order held as follows: 44. As regards the aforementioned plea of the noticee, I find that the demand in the impugned SCNs has been computed based on the chartered Accountants Certificate dated 27.04.2001 produced by the noticee. The assessable value in terms of section 4 of the Central Excise Act, 1944 and the valuation of the Rules thereof, has been considered as per the declared value in the C.A. Certificate. However, the deduction claimed on account of quality discount rebate/cash discount, the noticee failed to adduce any documentary evidence to claim that these deductions are in the nature of normal trade discounts. Accordingly, I reject their claim in the matter. Similarly, apart from a bald claim they have n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 05.2001 recorded under section 14 of Central Excise Act, 1944. The relevant portion of his statement dated 12.05.2001 is re reproduced as under:- Q.21. you are now shown the invoice, payment details in respect of depot invoice no. 54QQj000370 dated 06.04.2001, and corresponding factory invoice number 17 dated 03.04.2001 and sales policy no.PFY j2001-2002jCR-04. In the sales policy the prices are inclusive of 36.8%, which is ₹ 120 per kg. and according to payment details; it is recovered from the customers. However, in the invoice number 17 dated 03.04.2001, the Central Excise duty paid ₹ 2.5 per kg, plus additional duty @15%. Are you agree that the above facts are correct. I have seen above papers. Above statements are correct. However, detailed explanation can be provided by V.P. (Marketing). Mr. R. S. Dhand, I have put my signature on above documents, in token of having seen the same. 45.2 Thus, it is evident that the noticee have paid Central Excise duty @ ₹ 2.50 per kg + 15 % additional, whereas in actuals they have charged and collected from their customers such duty @ 36.80% adv, and hence their claim to deduct Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of tax by resorting to dubious methods. It is the obligation of every citizen to pay the taxes honestly without resorting to subterfuges. On this aspect one of us, Chinnappa Reddy, J. has proposed separate and detailed opinion with which we agree. In the same decision, Justice O Chinappa Reddy, laying down the foundation of the above principle spoke as follows: We think that time has come for us to depart from the Westminister principle as emphatically as the British Courts have done and to dissociate ourselves from the observations of Shah, J. and similar observations made elsewhere. The evil consequences of tax avoidance are manifold. First there is substantial loss of much needed public revenue, particularly in a welfare state like ours. Next there is the serious disturbance caused to the economy of the country by the piling up of mountains of black money, directly causing inflation. Then there is the large hidden loss to the community (as pointed out by Master Sheatcraft in Modern Law Review 209) by some of the best brains in the country being involved in the perpetual war waged between the tax-avoider and his expert team of advisers, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to refuse to give judicial benediction. 5.5.3 The letter filed for seeking twin registration and as recorded in the tribunal order as reported in case of G S Singhvi [2004 (171) ELT 494 (T-Mum)], is reproduced below: Subject : Request for Registration u/r 174 of Central Excise Rules Konkan Synthetic fibres is a division of M/s. Century Enka. Ltd. (CEL), a company registered under The Companies Act, 1956 and are engaged in the manufacture of Polyester Filament yarn required for textile operations for the last more than ten years. We have kept pace with the development of the PFY industry and the emergence as also greater use or value added products and have accordingly established facilities not only for manufacture of PFY but also for value added products viz. Texturised Yarn, Draw Twisted/Draw Warper Yarn, Dyed Yarn, etc. CEL is a multi locational company manufacturing variety of products which are briefly given below : Location/Site Name of the unit/division Products manufactured Pune (Cen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensure smooth changeover to Product Group concept, initially an exception was made so that the HSS machine and its product POY was continued to be managed by the Product Group - Textile Yarn. Due to difficulties, we have not been successful in achieving the basic objective of the Product Group concept in the true sense. As, by now the product groups are functioning smoothly, in order to conclude the changeover and to further consolidate the new management structure, it has now been decided to hand over the total control/management of the HSS machines at Mahad to the Product Group - POY. This will not only enable the Product Group to function more effectively but also give much needed focus to the two separate product groups at Mahad site. This will also in the long run, enable the two product groups to consolidate, expand and grow in their respective areas. For achieving this to the best possible extent and to give greater flexibility and more freedom in decision making, manufacturing as well as marketing of its products and to have stricter cost controls, it has been decided to completely segregate these two units by a suitable compound as well as a separate In/Out gate with inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nagement , sought to create a colorable instrument a fa ade in name of product management group for evading the payment of legitimate duty due. The intention of the appellant is also clear from the fact that they had been selling the said goods from their depots by charging the duty @ 36.8% ad valorem instead of the duty actually paid by them after bifurcation. They never declared the pricing mechanism to the department at the depot at the time of seeking an amendment in registration hence they had misstated the facts with the intention to evade payment of duty and hence in our view extended period of limitation has been correctly invoked against the appellants in the present order. Commissioner has in para 47.2 of his order held as follows: 47.2 Therefore, these acts of commission and omission on the part of all the Noticee have resulted in short payment of Central Excise duty of ₹ 38,24,41,595j-during the period April 2000 to March 2001 as demanded under SCN dated 30.05.2001, and is recoverable from them in terms of proviso to Sec 11 A (1) of Central Excise Act, 1944, read with Rule 9(2) and Rule 173B of Central Excise Rules, 1944. In support, I am inclined to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The second aspect would be whether there is any discretion not to charge the interest u/s. 11AB at all and we are afraid, language of Section 11AB is unambiguous. The person, who is liable to pay duty short levied/short paid/non-levied/unpaid etc., is liable to pay interest at the rate as may be determined by the Central Government from time to time. This is evident from the opening part of sub-section (1) of Section 11, which runs thus : Where any duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded, the person, who is liable to pay duty as determined under subsection (2) or has paid the duty under sub-section (2B) of Section 11A, shall in addition to the duty be liable to pay interest at such rate ........ The terminal part in the quotation above, which is couched with the words shall and be liable clearly indicates that there is no option. As discussed earlier, this is a civil liability of the assessee, who has retained the amount of public exchequer with himself and which ought to have gone in the pockets of the Central Government much earlier. Upon reading Section 11AB together with Sections 11A a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iso to subsection 1 of Section 11A and Section 11AC use the same expressions : ....by reasons of fraud, collusion or any wilful misstatement 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,... . In other words the conditions that would extend the normal period of one year to five years would also attract the imposition of penalty. It, therefore, follows that if the notice under Section 11A(1) states that the escaped duty was the result of any conscious and deliberate wrong doing and in the order passed under Section 11A(2) there is a legally tenable finding to that effect then the provision of Section 11AC would also get attracted. The converse of this, equally true, is that in the absence of such an allegation in the notice the period for which the escaped duty may be reclaimed would be confined to one year and in the absence of such a finding in the order passed under Section 11A(2) there would be no application of the penalty provision in Section 11AC of the Act. On behalf of the assessees it was also submitted that Sections 11A and 11AC not only operate in different fields but t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OY Section) and he himself. Similarly, Shri S.B. Kamath, Sr. Vice President, vide his statement dated 15.03.2001 recorded under section 14 of the Central Excise Act, 1944, also admitted that he was involved in obtaining separate registration for units to implement concept of product group management. This apart, I find that Shri G.M. Singhvi, Sr. Vice President and Shri RS. Dhand, vide their statements dated 12.05.200i and dated 14.05.2001 respectively admitted that they were charging collecting Central Excise duty @ 36.80% adv. From their customers where as they were actually paying duty to the Govt. Exchequer at specific rate of ₹ 2.87 per Kg. they have also admitted that they were involved in formulating a decision to bifurcate the unit based on the so called product group management concept. 50.2 Thus, from the above, I find that filing of application dated 16.03.2000 is a mere attempt to avail undue benefit of the notification 6/2000-CE dated 01.03.2000, despite of the knowledge that the composite unit still continue to exist and being operated under the single and overall management of M/s. CEL for all the purpose. Thus, noticees at Sr. No. (5) to (9) are awa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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