AMRITSAR CROWN CAPS (P) LTD., Vs. CCE, CHANDIGARH

JUDGEMENT

(1.) The appellants are manufacturers of Mazza which became liable to Central Excise duty w.e.f. 14.5.97 under the Finance Act. However, they started payment of duty only from 6.6.97. Thus, no payment of duty was made in respect of clearances from 14.5.97 to 5.6.97. The amount of duty not paid worked out to Rs.3,97,880/ - and on 3.11.97 the appellants debited this duty amount in their PLA. All the same a show cause notice dated 13.11.97 was issued to the party. In the adjudication proceedings a penalty equivalent to the duty not paid was imposed under Section 11AC. Interest demand @ 18% was also made under Section 11AB of the Central Excise Act, 1944. The appellant challenges the penalty as well as claim for interest.

(2.) Even though the case is posted today only for consideration of stay application of the penalty, the Learned Counsel appearing for the appellant submitted that the appeal itself may be disposed of as imposition of penalty and demand for interest are contrary to the legal provisions under which they have been imposed. The Counsel submitted that the appellants paid the duty not paid prior to issue of show cause notice. Section 11AC and 11AB are attracted only in cases of short levy on account of fraud, suppression of facts etc. The Learned Counsel submitted that such allegations were neither made nor adjudicated in the instant case. Infact, there was no occasion to make such allegations as the duty involved was paid by the assessee even before any demand was raised. The Learned Counsel for the appellant also relied on the decision of this Tribunal in the case of 2000 (12))ELT 81 in support of his contention.

(3.) Opposing the submissions made on behalf of the appellant, learned DR pointed out that, in the instant case even though the appellant was aware of the dutiability of the goods, they started clearing the same on payment of duty from 5.6.97 only. Duty in respect of the goods cleared from 14.5.97 to 5.6.97 was not paid by them untill 13.11.97. The learned DR submitted that this clearly showed that the appellant had evaded payment of duty intentionally. He also submitted that the show cause notice had invoked Rule 173Q of the Central Excise Rules also for the purpose of levy of penalty. He, therefore, submitted that in the peculiar facts of the case, penalty was fully justified. He also relied on the decision of this Tribunal reported in 2000 (125) ELT 851 and 2000 (118) ELT 764 and submitted that it is settled law that in fiscal matters mens -rea is not relevant for the purpose of imposition of penalty. DR also submitted that penalty was imposable under Section 11AC even in cases of contravention of any provision of the Rules with intention to evade payment of duty, and in the present case, the appellant had not taken registration of modvat in violation of Rule.