AIT-News-24

CBI raids 15 MLAs in Jharkhand for taking bribe in Rajya Sabha elections Rajya Sabha passes Finance Bill 2012 Petrol & Diesel prices to be hiked FM says Government to take hard measures after Rupee hits all time low of 54.52 against US Dollar Yeddy applies for bail after CBI raids on his residence Income Tax Officer SK Saini sentenced to 3 years RI + fine of Rs 35 Lakh by CBI Court in Bhopal IRS Officer Brahmananda Reddy arrested by CBI Founder of Matrix Laboratories Nimmagadda Prasad also arrested by CBI Tariff Value for import of Brass scrap is 4362 & for poppy seeds 3680-for gold 507 per 10 gram & for silver 920 per kg-Customs Non-Tariff Notification No.42 Customs duty exempted on import of 191 Products from Singapore-Customs Tariff Notification No.33 Import of 485 Products from Singapore exempted from Customs duty-Customs Tariff Notification No.34 Import of 496 Products from Singapore exempted from 50 per cent of applied rate of duty-Customs Tariff Notification No.35 Saurabh Chandra gets additional charge of Commerce Secretary ITAT Member N Vasudevan transferred from Mumbai to Bangalore-J Sudhakar Reddy moves from Mumbai to Delhi-IP Bansal from Delhi to Mumbai-IC Sudhir from Pune to Delhi CVD on imported electronics lowered due to higher rates of abatement from RSP notified-Abatement from MRP for excise payment on all electronic products prescribed at uniform rate of 35 per cent-Abatement revised for several products-Central Excise Non-Tariff Notification No.26 Suppliers to Mega Power Projects face silly excise demands-Click on the link below for full details Excise demand of Rs 32 Crore confirmed against Exide for not paying excise on MRP basis on lead acid storage battery RBI says Exporters required to convert 50 per cent of their foreign exchange holdings into Rupee within 15 days-Exporters will be allowed to buy foreign currency only after utilizing all their foreign currency holdings Articles of jewellery exempted from excise duty-Specified Railway Goods manufactured by Government exempted from excise -Central Excise Tariff Notification No.23 Excise on specified Petroleum Oils lowered Eye makeup preparations exempted from excise The excise exemption hitherto admissible on all Hawai Chappals will now be admissible to only Hawai Chappals of RSP up to Rs 500-Polyester staple fibre or polyester filament yarn, manufactured from plastic scrap or plastic waste including waste polyethylene terephthalate bottles exempted from excise-Excise on Motor chassis for vehicles lowered to 14 per cent excise-Excise on LED Lights of Chapter 85 lowered to 6 per cent-Inks for ball point pens exempted from excise-Central Excise Tariff Notification No.24-Parts of Footwear and hawai chappals of RSP not exceeding Rs. 500 per pair exempted from excise if consumed in factory-Central Excise Tariff Notification No.25-Excise exemption to goods required for initial setting up of solar power generation project or facility-Central Excise Tariff Notification No.26 CENVAT Credit (Fifth Amendment) Rules, 2012-No reversal of credit required for supplies made for setting up of solar power generation projects or facilities-Central Excise Non-Tariff Notification No.25 exemption from wholeof the additional duty leviable shall not apply to Hand held Metal/Mine/Bomb detectors etc.-Customs Tariff Notification No.30 Import of specified goods allowed at concessional rate of duty-Customs Notification No.31 Lok Sabha passes Finance Bill 2012 FM defers the applicability of GAAR provisions by one year- GAAR provisions will now apply to income of Financial Year 2013-14 and subsequent years-The retrospective clarificatory amendments now under consideration of Parliament will not be used to reopen any cases where assessment orders have already been finalized-long term capital gain arising from sale of unlisted securities in case of non-resident investors, including PE investors lowered to 10 per cent-FM extends benefit of tax exemption on long term capital gains to sale of unlisted securities in IPO-lower rate of withholding tax of 5% for funding all businesses-FM withdraws the provision for levy of TDS on transfer of immovable property-FM raises the threshold limit for TCS on cash purchases of jewellery to Rs.5 lakh-only serious offences under the customs law involving prohibited goods or duty evasion exceeding Rs.50 lakh, shall be cognizable- all these offences shall be bailable-changes in the definition of “service” which will exclude the activities specified in the Constitution as “deemed sale of goods”-The definition of “works contract” also enlarged to include movable properties- Exemption for specified services relating to agriculture in the Negative List extended to agricultural produce enlarging the scope of the entry Anti-dumping duty on imports of Partially Oriented Yarn, originating in, or exported from China-Customs Notification No.22 Customs duty on import of 806 Products from Japan lowered Anti-dumping duty imposed on import of Phosphoric Acid of all grades and all concentrations (excluding Agriculture/FertilizerGrade) , falling under tariff item 28092010, originating in, or exported from,Israel and Taiwan-Customs Tariff Notification No.19 Customs duty on import of composite fertiliser lowered to 1 per cent-Customs Tariff Notification No. 24

JUDGMENTS

CENTRAL EXCISE

CUSTOMS

exchange rate

SERVICE TAX

INCOME TAX

VAT

FINANCE ACTS

FINANCE BILLS

EOU STPI

SEZ

DGFT

RBI

NTT

RESOURCES

Email | Print

Machino Montell 11AC shock for manufacturers

AIT News Network

MUMBAI. A recent ruling of High Court AIT-2006-166-HC has come as a shock to manufacturers; wherein the High Court has overruled Machino Montell ruling in case of AIT-2004-12-CESTAT-LB which laid down that when the duty amount is paid by the assessee before issuance of show cause notice, no penalty can be imposed under Section 11AC of Central Excise Act. As a fallout of ruling; it is going to be tough time for Manufacturers and Advocates to contest the Adjudication Orders wherein Penalty has been imposed under Section 11 AC.

T H E F A C T S:

The respondent is a manufacturer of polypropylenecompounding falling under Chapter heading 39 of the Schedule to the Central Excise Tariff Act, 1985. It was noticed that for the years ending 31.03.1997, 31.03.1998 and 31.03.1999, forged entries were shown in RG-I register. Show cause notice dated 19.06.2001 was issued under Section 11A of the Central Excise Act, 1944 (for short “the Act”), requiring the assessee to show cause why additional duty and penalty be not imposed.

· After considering the view point of the assessee, the adjudicating authority held that the party had clandestinely removed finished goods without issue of invoice and without payment of duty. Interest and penalty was levied thereon willfully and intentionally evading payment of duty. The said duty was however, deposited without any protest on 23.5.2001 prior to the show cause notice dated 19.6.2001.

Penalty of Rs.1,12,900/- under Section 11 AC was imposed. On appeal, Commissioner, Central Excise (Appeal) set aside the order of penalty, holding that the assessee had already deposited the duty fixed before issuance of show cause notice and as such, imposition of penalty is not called for. The revenue preferred an appeal, which was dismissed by the Tribunal.

Provision of Section 11 AC of the Act providing for penalty reads as under:-
“11 AC. Penalty for short-levy or non-levy of duty in certain cases. - Where any 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 misstatement 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 person who is liable to pay duty as determined under sub-section (2) of section 11-A, shall also be liable to pay a penalty equal to the duty so determined:

Provided that where such duty as determined under sub-section (2) of section 11A, and the interest payable thereon under section 11 AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section be twenty-five per cent of the duty so determined:

Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso:

Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty, as reduced or increased, as the case may be, shall be taken into account:

Provided also that in case where the duty determined to be payable is increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, the benefit of reduced penalty under the first proviso shall be available, if the amount of duty so increased, the interest payable thereon and twenty-five per cent of the consequential increase of penalty have also been paid within thirty days of the communication of the order by which such increase in the duty takes effect.”

T H E R U L I N G:

A perusal of the above provision, shows that the said provision incorporates liability to pay penalty in the situations mentioned therein. Once a case is covered by the situation mentioned in the Section, mere deposit prior to issuance of show cause notice under Section 11 A of the Act will not necessarily negate the situation mentioned in the said Section.

Applicability of Section 11 AC is not excluded at the threshold merely on deposit of the amount after having been caught and before the issue of show cause notice.

( Click here for full text of unreported HC ruling AIT-2006-166-HC)