Case Law Details
Meghmani Organics Ltd Vs C.C.E. & S.T. (CESTAT Ahmedabad)
CESTAT find that there is no dispute about the duty and interest which were already paid by the appellant on pointing out by the audit. The only limited issue to be decided by me in the given facts and circumstances are that whether the appellant is liable to pay penalty under Section 11AC.
Adjudicating authority has given the elaborated reasoning for imposition of penalty under Section 11AC. Right from the beginning the appellant’s defense is that since the duty was paid and show cause notice was issued within a normal period of one year, the penalty under Section 11AC should not be imposed.
From the bare reading of the above Section 11AC prevalent at the relevant time, it is found that in the section an exception is provided if any duty is paid within one year from the due date or the show cause notice issued covers normal period of one year, the ingredients for imposing penalty under Section 11AC is only that if the duty was not paid by reason of fraud or collusion or willful mis-statement or suppression of fact or in contravention of any of the provision of this act or rules made therein with intent to evade payment of duty. Now, in the present case whether any of these ingredients exists in the facts of the present case needs to be examined. I find that the appellant was very conscious while debonding of the unit and duty so payable on the stock of the goods as on 03.01.2008 was calculated and paid the duty on that basis. The departmental officers have issue NOC enabling the appellant to exit from EOU status however, there are some transaction of the goods from 03.01.2008 till 28.01.2008 on which also the duty by EOU was supposed to be paid. The appellant was well aware that the duty due on the stock was required to be paid for debonding of the EOU. Though, the appellant have paid the duty on the stock as on 03.01.2008 but knowing that some goods were lying from 03.01.2008 to 28.01.2008 but have not paid the duty. This clearly shows that once the appellant have obtained the NOC and unit was debonded, they intentionally avoided the payment of short duty. It is only on pointing out by the audit they have paid the duty, this fact clearly shows that the appellant knowing that before debonding, on all the goods lying in the factory they are required to pay the duty but they consciously not paid the duty which amounts to suppression of fact on their part. Therefore, even though they paid on pointing out by the audit and despite the show cause notice covers period of one year, they clearly fall under four corners of Section 11AC accordingly, the penalty was rightly imposed under Section 11AC of the Central Excise Act, 1944 on the appellant.
CESTAT have carefully considered the judgments cited by the learned counsel and on going through the same, CESTAT find that the facts of those cases are different from the facts in the present case therefore, the judgments are not applicable in the present case. Accordingly, I do not find any infirmity in the impugned order upholding the penalty under Section 11AC therefore, the same is upheld.
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