The Ahmedabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed the penalty under Section 11AC of the Central Excise Act, 1944 (CETA) and observed that the demand of the extended period is not sustainable in the absence of proof of suppression of fact.
The respondent in the present matter is Quippo Energy Pvt Limited. In the revenue’s appeal, the revenue seeks to impose equal of penalty under Section 11AC of the Central Excise Act, 1944 as against the penalty of Rs.1 lakh was imposed by the adjudicating authority.
Tara Prakash, Deputy Commissioner (AR) appearing on behalf of the revenue submitted that the adjudicating authority though imposed penalty under Section 11AC of the Central Excise Act, 1944 but against the total duty amount of Rs. 3 crores only penalty of Rs. 1 lakh was imposed whereas, there is no option for the adjudicating authority except to impose penalty of equal amount of duty in terms of Section 11AC of the Central Excise Act, 1944.
Amber Kumarawat, counsel appearing on behalf of the respondent submitted that against this common impugned order, the assessee had also filed an appeal before this tribunal challenging the demand of duty and penalty.
In the said appeal, the tribunal vide final order no. A/11498-11501/2015 confirmed the demand for the normal period but set aside the demand of extended period and also set aside the penalty imposed under Section 11AC of the Central Excise Act, 1944 accordingly, the penalty under Section 11AC of the Central Excise Act, 1944 cannot be enhanced as appealed by the revenue in the present appeal.
The Coram comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member noted that “Since there is no suppression of fact, demand of extended period is not sustainable. The penalty imposed in the impugned order is held to be not warranted accordingly, the same was set aside.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
