Commissioner Of Central Excise , Bolpur Commissionerate vs. M/S. V. S. P. Udyog PVT. LTD. & Another

Facts

The appeal was filed by the Commissioner of Central Excise, Bolpur Commissionerate (appellant/revenue) against an order dated February 5, 2016, passed by the Customs, Excise and Service Tax Appellate Tribunal (CESTAT). The CESTAT had confirmed the duty but not imposed a penalty under Section 11AC of the Central Excise Act, 1944. The dispute involved a shortage of finished goods and inputs, which the revenue alleged was done with the intention to evade duty and involved suppression of facts by the respondent, M/s. V.S.P. Udyog Pvt. Ltd. The tax effect in dispute was Rs. 27.64 lakhs.

Held

The Court noted that the appellant (revenue) sought to withdraw the appeal based on a communication from the Central Tax, Bolpur GST Commissionerate dated January 20, 2022. The reason for withdrawal was that the tax effect of Rs. 27.64 lakhs was below the threshold limit fixed by the CBIC notification dated August 22, 2019. Consequently, the Court disposed of the appeal on the ground of low tax effect. The questions of law raised by the revenue were expressly left open. The Court did not make any findings on the merits of the issues concerning the imposition of penalty under Section 11AC of the Central Excise Act, 1944. The operative direction was to dispose of the appeal as withdrawn.

Key Issues

1. Whether the Learned Tribunal was right in not imposing penalty under Section 11AC of the Central Excise Act, 1944, when shortage of finished goods and inputs was found with the intention to evade duty and suppression of facts was evident, committed by the Respondent No.1? (Question of law turning on Section 11AC of the Central Excise Act, 1944). 2. Whether the Respondent No.1 is liable for payment of penalty under Section 11AC of the Central Excise Act, 1944, when it is admitted that excisable goods were removed without payment of duty with clear intention to evade duty and suppression of facts and mis-statement are present? (Question of law turning on Section 11AC of the Central Excise Act, 1944). Contentions of the Appellant (Revenue): The appellant argued that the Tribunal erred in not imposing penalty under Section 11AC. They contended that the shortage of goods and the removal of excisable goods without payment of duty clearly indicated an intention to evade duty, coupled with suppression of facts and mis-statement by the respondent. Contentions of the Respondent: The judgment does not record any specific arguments made by the respondent.