TMI Blog2008 (9) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... ies of the Appellant Company became free sale sugar, classifiable under heading 1701.39, duty was payable on the same at the rate applicable to the free sale sugar. – Demand of differential duty not sustainable - allegation of mis-statement, or suppression of fact with intent to evade the payment of duty does not make any sense, more so when the duty paid was to be reimbursed to them by the Govt – penalty and interest not justified - E/4627-28/2004 - 735-736/2008-EX(PB), - Dated:- 29-9-2008 - S/Shri S.S. Kang, Vice-President and Rakesh Kumar, Member (T) REPRESENTED BY : Shri Atul Gupta, Company Secretary, for the Appellant. Shri C.S. Rajput, DR, for the Respondent. [Order per : Rakesh Kumar, Member (T)]. - The Appellants are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferential duty amounting to Rs. 1,44,408/- on 11-7-02. The Department, however, in respect of Deoria unit had issued a show cause notice dt. 12-10-99 and in respect of Ghughli unit had issued show cause notice dt. 5-9-01 seeking recovery of the short paid duty along with interest on duty at the applicable rate as per the provisions of Section 11AB of the Act and also imposition of penalty on the appellant under Section 11AC of Central Excise Act, 1944 as well as Rule 173Q(1) of Central Excise Rules, 1944. Both the show cause notices were adjudicated by the Additional Commissioner who confirmed the duty demands by invoking proviso to Section 11A(1) of the Act along with interest on duty at the applicable rate under Section 11AB and besides t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elease of sugar from free sale portion as levy sugar on loan basis into sale and the payment of differential amount to the sugar mills, they are guilty of suppression of irrelevant facts and therefore, the Addl. Commissioner has rightly confirmed the duty demands by invoking extended period under Section 11A(1) of the Act along with interest on duty under Section 11AB and has rightly imposed penalty on the Appellant under Section 11AC. 3. We have carefully considered the submissions made from both the sides. The Appellants are a public-sector undertaking of the Govt. of U.P. having a number of sugar mills. The sugar by both the units of the Appellant's sugar mill, was sold to the Govt. as levy sugar on loan basis out of free sale sugar qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n be accused of suppression of the relevant information and accordingly whether they are liable for penalty under Section 11AC and interest on duty under Section 11AB. During the period of dispute, the interest on duty under Section 11AB and penalty under Section 11AC were linked with the question as to whether the assessee is guilty of fraud, mis-statement, suppression of facts etc. 4.1 Since the Appellants are public-sector undertaking of the Govt. of U.P., the allegation of mis-statement, or suppression of fact with intent to evade the payment of duty does not make any sense. It is unconceivable that the Sugar Mills owned by a State Govt. owned Corpn. would try to evade the payment of duty by resorting the wilful suppression of facts ..... X X X X Extracts X X X X X X X X Extracts X X X X
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