By TIOL News Service

NEW DELHI, JULY 02, 2013: THIS is an ‘interesting' Revenue appeal.

When the officers of the anti-evasion wing visited the factory of the appellant and calculated the total stock of M.S ingots, it was found to 4.596 M.T. A shortage of 32.174 M.T. was detected. Since respondent failed to explain the reason for said shortage, it was concluded by the revenue that short found material has been cleared surreptitiously with intent to evade payment of duty. The respondents deposited duty of Rs.52,493/- on 4/11/2009. Later, they also deposited 25% of the penalty within 30 days of the issuance of the SCN.

The SCN was adjudicated by the Asstt. Commissioner who after confirming the demand appropriated the amount already paid and after imposing equivalent penalty appropriated the 25% paid.

The appellant challenged the order of imposition of equivalent penalty before the Commissioner(A) and he agreed that the penalty should have been only 25% of the duty demanded. Accordingly, he allowed the appeal to the said extent.

The Revenue has challenged this order before the Tribunal by submitting that since there was suppression of facts, respondents were debarred of amnesty in terms of sub-section 2B of Section 11A(1) of the CEA, 1944.

The Bench adverted to the Taxation Laws (Amendment) Act, 2006 which came into effect from 13.07.2006 and the Board Circular 831/08/2006-CX., Dated: July 26, 2006 issued on the subject matter and which reads -

“2. Section 11A of the Central Excise Act, 1944 has been amended to introduce an optional scheme for enabling voluntary payment of duty by assessees, in full or in part, in cases involving fraud, mis-statement etc. along with interest and 25% of the duty amount as penalty within 30 days of the receipt of the show cause notice thereby dispensing with the rigours of adjudication procedure. This is an additional facility given to the Trade to settle the dispute at an early stage to reduce litigation and also aid in collection of tax dues more expeditiously. The scheme is optional and not compulsory. The assessee has the further option of using the proposed facility in full or in part. In case of part payment, the remaining amount will be subject to regular proceedings as per the law.”

Taking cognisance of the aforesaid, the Bench held -

“10. In view of above, there is no force in department's appeal that considering this case of clandestine removal 100% penalty should be levied. He has not appreciated the Amendment brought vide Board's circular No.831/08/2006 Dt. 26.07.2006. Once respondent have exercised the option to pay 25% penalty within specified time it is correct in view of facts and legal provisions stated above.”

Accordingly the Revenue appeal was rejected.

(See 2013-TIOL-992-CESTAT-DEL)