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TMI Blog2024 (1) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... on and as such, the utilization of the same for the payment of duty and refund of the same is not correct. Accordingly, a show-cause notice dated 28.08.2008 was issued to the appellants; Commissioner of Central Excise, Jammu & Kashmir vide Order dated 25.02.2011 confirmed the recovery of the amounts demanded along with interest; however, Commissioner has refrained from imposing penalty under Section 11AC of the Central Excise Act, 1944, Rule 25 & Rule 27 of the Central Excise Rules, 2002. Revenue is in appeal against the non-imposition of penalty. 2. Shri Nikhil Kumar Singh, assisted by Shri Aneesh Dewan, learned Authorized Representatives for the Department, reiterates the grounds of appeal and submits that the appellants have taken self-credit and refund in a fraudulent manner and therefore, are liable to pay back the refund amount along with interest and also are liable to penal action. They rely in the case of Dilip Kumar - 2018 (361) ELT 577 (SC) and submits that exemption notifications should be construed strictly. Relying on Zunjarrao Bhikaji Nagarkar - 1999 (112) ELT 772 (SC), they submit that offence being established, imposition of penalty is mandatory and only quantum i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ult 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 the two provisions are also separated by time. The penalty provision of Section 11AC would come into play only after an order is passed under Section 11A(2) with the finding that the escaped duty was the result of deception by the assessee by adopting a means as indicated in Section 11AC. 19. From the aforesaid discussion it is clear that penalty under Section 11AC, as the word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra). Therefore, the matter was referred to a larger Bench." After referring to a number of decisions on interpretation and construction of statutory provisions, in paragraphs 26 and 27 of the decision, the court observed and held as follows : "26. In Union Budget of 1996-97, Section 11AC of the Act was introduced. It has made the position clear that there is no scope for any discretion. In para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given. "27. Above being the position, the plea that the Rules 96ZQ and 96ZO have a concept of discretion inbuilt cannot be sustained. Dilip Shroff's case (supra) was not correctly decided but Chairman, SEBI's case (supra) has analysed the legal position in the correct perspectives. The reference is answered.........". 21. From the above, we fail to see how the decision in Dharamendra Textile can be said to hold that Section 11AC would apply to every case of non-payment or short payment of duty regardless of the conditions expressly mentioned in the section for its application. 22. There is another v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what Dharamendra Textile decides. 24. It must, however, be made clear that what is stated above in regard to the decision in Dharamendra Textile is only in so far as Section 11AC is concerned. We make no observations (as a matter of fact there is no occasion for it!) with regard to the several other statutory provisions that came up for consideration in that decision. 25. In light of the discussion made above it is evident that in both the appeals, orders were passed by the Tribunal on a wrong premise. In both the appeals, therefore, the impugned orders passed by the Tribunal are set aside and the matters are remitted to the respective Tribunals for fresh consideration, in accordance with law, and in light of this judgment. As the matters are quite old it is hoped and expected that the Tribunal would pass the final order within four months from the date of the receipt of this order. 5. On going through the records of the case, though we find that the demand is issued under Section 11A of Central Excise Act, 1944, the proviso is not invoked. No elements of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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