2018 (12) TMI 775 – CESTAT KOLKATA – TMI – Penalty u/s 11AC of CEA – Clandestine removal – entire amount of differential duty alongwith interest paid on their own before intervention of the department – Held that:- Such reversal of credit on the basis of their own ascertainment and payment of interest involved thereon, before the issuance of relevant Show Cause Notice, is in agreement with the provisions of sub-section (1)(b)(i) of Section 11A of the Central Excise Act, 1944 – appeal dismissed – decided against Revenue. – Appeal No. E/77119/2017, CO-75258/2018 – FO/76566/2018 – Dated:- 10-5-2018 – Shri P.K. Choudhary, Member (Judicial) Shri D. Halder, AC(AR) for the Appellant (s) Shri Anjan Dasgupta, Advocate for the Respondent (s) ORDER Per Shri P.K. Choudhary 1. Briefly stated the facts of the case are that the appellants are engaged in the manufacture of M.S. Round, CMS Crossing, Bogie, Coupler Body/Set, Back Stop, Draft Gear etc. classifiable under Chapter 72,73 & 86 of the Fi
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ntly paid the differential duty with interest on their own and also reiterated the fact in the relevant ER-I Returns. In fact there was no occasion to issue show cause notice. 4. Heard both sides and perused the appeal records. 5. I find that the assessee had paid the entire amount of differential duty alongwith interest on their own before intervention of the department. I observe that the first appellate authority has discussed the issue in details. The relevant portions of the impugned order are reproduced for the sake of appreciation of the facts and law on the point: 14. In view of the above, I am of the considerate opinion that the Chartered Accountant s Certificate should have been given due cognizance to display the application of judicious nature of mind by the lower authority during the course of appreciating the factual matrix of the instant case. 15. It obviously follows from the above discussions that in absence of any of the excluding elements as specified in subsection (
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2 and 163 dated 25.07.2012 and 164 & 165 dated 26.07.2012, based on their own ascertainment, before issuance of the impugned Show Cause Notice dated 16.11.2016 was served on them. The details of such payment of duty by way of raising supplementary invoices has also been furnished by them in their relevant ER-I Returns pertaining to the months of May 11, June 12 which had been submitted by them to the Department on 09.06.2011, 10.07.2012 and 10.08.2012 respectively. All such payments of duty had been done before issuance of the impugned Show Cause Notice dated 16.11.2016. In addition, they have also paid the interest involved in this case and totaling to ₹ 9,93,447/- vide e-Challan Nos. 00274 dated 26.12.2014, 00069 dated 23.08.2014 and 00211 dated 30.08.2013, which too had been paid before issuance of the impugned Show Cause Notice dated 16.11.2016 was served on them. Such reversal of credit on the basis of their own ascertainment and payment of interest involved thereon, bef
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garding imposition of penalty on the appellant in terms of Section 11AC of the Central Excise Act, 1944, I find that the statute explicitly bars the imposition of penalty in cases where the assessee concerned is eligible for availment of benefit of sub-section (2) of Section 11A of the said Act. Accordingly, I am of the considerate opinion that the penalty imposed by the impugned OIO deserves to be set aside being not maintainable on merit. 20. In view of the discussions above, I uphold the impugned OIO only to the extent of demand for recovery of duty along with appropriate interest. Penalty imposed is set aside and appeal is allowed on the above terms with consequential relief. 6. In view of the above discussions I do not find any infirmity in the impugned order and the same is hereby sustained. 7. The appeal filed by the revenue is dismissed. Cross objection is disposed of. (Operative portion of the order have already been pronounced in the open court) – Case laws – Decisions – Ju
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