By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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Even if extended period invoked u/s. 11A(4), for imposition of penalty u/s. 11AC, proof to satisfy ingredients of fraud, collusion or any willful conduct etc., necessary.
Facts:
The assessee was engaged in manufacture of Galvanized Transmission Towers and parts thereof. The department observed that the assessee cleared these goods and parts thereof with remarks on the invoices that they were exempted from payment of excise duty. Commissioner (Appeals) after referring to Notification in this regard and after analysing the entire material on record concluded that the assessee acted bonafide on the advice/purchase order of the customer and availed the exemption. When it was pointed out later on that the condition No. 64 of the Notification is not fulfilled and the exemption is not available to the assessee, the assessee paid the amount of duty leviable together with interest thereon. Since there was nothing on record as to existence of fraud, collusion, any willful misstatement or suppression of facts, etc., so as to enable the Revenue to impose the penalty, the Commissioner (Appeals) set aside the penalty. Tribunal upheld the order of Commissioner. The case of the department was that when the Revenue invoked the extended period within the meaning of s/s. (4) of section 11A of the Central Excise Act, 1944 for the purpose of payment of duty, then, a separate proof for satisfying the ingredients thereof is not necessary for imposition of penalty.
Held:
The High Court held that if the material produced is not pointing towards any fraud or collusion or any willful misstatement or suppression of facts or contravention of the provisions of the Act or Rules with an intent to evade payment of duty, then, imposition of penalty is not called for.
