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TAXAP/1623/2010 3/ 3 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX
APPEAL No. 1623 of
2010
=========================================================
COMMISSIONER
OF CENTRAL EXCISE - Appellant(s)
Versus
M/S
JAY AMBE TEXTILE - Opponent(s)
=========================================================
Appearance
:
MR
YN RAVANI
for
Appellant
None for
Opponent
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE AKIL KURESHI
and
HONOURABLE
MS JUSTICE SONIA GOKANI 24th March 2011
ORAL
ORDER (Per
: HONOURABLE Ms. JUSTICE SONIA GOKANI)
Revenue, in the
present Appeal, has proposed following question of law for our
consideration :-
“Whether
the CESTAT is justified in giving the option of reduced penalty under
proviso to Section 11AC of the Central Excise Act, 1944 ?”
“Whether
CESTAT has power to give option to the party to pay reduced penalty
of 25% of the duty within 30 days from receipt of the CESTAT order,
when the CESTAT has not re-determined the quantum of duty ?”
On the basis of an
intelligence, the Preventive Officers of the Central Excise
Department visited the factory premises of the assessee-M/s. Jay Ambe
Textiles and after search, on account of shortage of man-made
fabrics, levied duty. A show cause notice was issued to the assessee
for confirmation of duty under Section 11A of the Central Excise Act,
1944. The Adjudicating Officer directed recovery of duty, interest
and penalty.
Being aggrieved with the
order-in-original dated 21st January 2000, the
Commissioner [Appeals], Central Excise, Ahmedabad was approached who
reduced penalty as the confirmation of duty demand was not challenged
and the duty was already paid prior to show cause notice.
Against that view of the
Commissioner [Appeals], the Department preferred Appeal before the
CESTAT where it rejected the appeal of the Revenue confirming the
order of the Commissioner [Appeals]. Against this order of CESTAT
dated 21st July 2005, Tax Appeal No. 448 of 2006 was
preferred by the Department before this Court for enhancement of
penalty equal to the duty evaded under Section 11AC of the Central
Excise Act, 1944. This
Court vide Order dated 1st July 2009 remanded the
matter back to the Tribunal for reconsideration of the question on
applicability of Section 11AC of the Central Excise Act, in light of
the decision of the Apex Court in the case of Union of India v.
Dharmendra Textile Processors, reported in 2008 (231) ELT
p-3, and the one, as given in the case of Union of India v.
Rajasthan Spinning & Weaving Mills & Anr., reported
in 2009 (92) RLT 691 (SC).
This issue was once
again decided by CESTAT, Ahmedabad on 4th February 2010
wherein it has noted that the Revenue has not disputed payment of
duty prior to issuance of show cause notice and considering the ratio
in this respect, it has held that, “…I give option to the
appellants to deposit duty, interest and 25% of the duty amount
towards penalty, within 30 days from receipt of this order. It
is made clear that failure to pay either duty or interest in full and
25% of duty towards penalty within 30 days of receipt of this Order,
respondents shall be liable to pay 100% of duty demand towards
penalty..”
The Division Bench of
this Court in the case of Commissioner of Customs & Excise,
Ahmedabad-I v. Akash Fashion Prints Private Limited, reported
in 2009 (239) E.L.T 439 (Guj) has held that, “…Section
11AC of the Act provides for levy of penalty in case of short levy or
non-levy of duty in certain cases. The first proviso thereunder
provides for exception to the main provision by stipulating that
where the duty and the interest are paid within thirty days from the
date of communication of the order of the Central Excise Officer
determining such duty, the amount of penalty liable to be paid under
Section 11AC of the Act shall be 25% of the duty so determined; and
under second proviso, it is provided that the benefit of reduced
penalty under the first proviso shall be available if the amount of
penalty so determined has also been paid within a period of thirty
days referred to in the first proviso.”
This
Bench also, in Tax Appeal No. 830 of 2010, considering the decision
in the case of Akash Fashion Prints Private Limited [Supra],
has dismissed the Appeal. Since there is no reason to interfere with
the order passed by the Customs, Excise & Service Tax Appellate
Tribunal, Ahmedabad, which is in consonance with the ratio laid down
by this Court, we see no merit in the present Appeal. Accordingly,
the Appeal is dismissed. No costs.
{Akil
Kureshi, J.}
{Ms.
Sonia Gokani, J.}
Prakash*
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