The Chandigarh Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) upheld the non-imposition of penalty under Section 11A of the Central Excise Act, 1944 as there was no allegation for invocation of extended period.
Department was of the opinion that these duties and cesses are not notified for grant of exemption under the said Notification and as such, the utilization of the same for the payment of duty and refund of the same is not correct. Accordingly, a show-cause notice was issued to the appellants; Commissioner of Central Excise, Jammu & Kashmir vide Order confirmed the recovery of the amounts demanded along with interest; however, Commissioner has refrained from imposing penalty under Section 11AC of the Central Excise Act, 1944. Revenue is in appeal against the non-imposition of penalty.
Authorized Representatives for the Department, reiterated the grounds of appeal and submits that the appellants have taken self-credit and refund in a fraudulent manner and therefore, are liable to pay back the refund amount along with interest and also are liable to penal action.
A Two-Member Bench comprising SS Garg, Judicial Member and P Anjani Kumar, Technical Member observed that “Coming to the imposition of penalty under Section 11AC of the Central Excise Act, we find that the terms of the Section are very clear that penalty under the Section can only be imposed when duty of excise has not been levied or paid or has been short levied or short paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the Rules made thereunder with intent to evade payment of duty.”
“The ingredients for invocation of extended period being not even alleged, we are of the considered opinion that the Commissioner was right in his finding. To that extent, we find no infirmity in not imposing penalty under Section 11A of the Central Excise Act, 1944” the Bench noted.
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