Jurisprudentiol – Monday's cases

By Vijay Kumar

Legal Corner Icon — the image was hosted by the publisher and was not captured.Central Excise

25% penalty under Section 11AC is not applicable for proceedings before Settlement Commission: High Court

AN order of settlement is obviously distinct from an adjudication order of a Central Excise Officer, who has no power to accord immunity from prosecution while determining duty liability under the Excise Act. The order of settlement is in the form of a package and takes into consideration all the aspects of the case in a holistic manner before determining the issues of penalty and interest as well as the extent of immunity therefrom. Therefore, once the Petitioner has adopted the course of settlement he has to be governed by the provisions of the said Chapter. Resultantly, the benefit under the proviso to Section 11AC of the said act which could have been availed when the matter of determination of duty was before a Central Excise Officer is not attracted to the cases of a settlement undertaken under the provisions of Chapter-V of the Excise Act.

Income Tax - ITAT

Hyper technical objections – Members of Bench differ even on points of difference - Even oral plea can also be made for raising an additional ground – THE

two Members of the ITAT Bench did not agree on an issue. As there was a difference of opinion, it had to be referred to a third Member. The two members also did not agree on what the difference of opinion was. It is well known that there is no prescribed proforma to raise an additional ground. There is no specific procedure to be followed to raise an additional ground. What all is required is that the appellant needs to take leave of the Tribunal before raising additional ground and the Tribunal needs to give an opportunity of being heard to the affected party.

ORDER by one Member of the Bench cannot be given effect to: the J.M. did not adjudicate on the merits of the issue as he did not admit the additional ground. On the other hand, since the ld. A.M. admitted the additional ground, he adjudicated on the merits as well. There is nothing wrong in what the ld. A.M. has done. However, so far as granting of relief is concerned, it cannot be granted in the absence of a decision by the Bench.

Central Excise

Benefit of sub-section (2B) to section 11A of CEA, 1944 is not available where duty became payable before 11.05.2001 – declarations u/r 173C were being filed and exercise revenue neutral, hence penalty u/s 11AC set aside: CESTAT.

THE assessee was clearing excisable goods to their sister concern by valuing them on cost construction method. This method of valuation was pointed out as incorrect by the department and the assessee willingly paid the differential duty of over Rs.15 lakhs. This payment was made in September 2000. Later a demand notice was issued seeking appropriation of the amount paid and imposition of penalty and interest under section 11AC and 11AB respectively.

See our columns Monday for the judgements