IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO.            OF 2012 (@ DY.NO.11065 OF 2006)

COMMNR.OF CENTRAL EXCISE, KOLKATA ... APPELLANT

VERSUS

M/S.PLAXAIR INDIA PVT. LTD.     ... RESPONDENT

O R D E R

1.  Delay condoned.

2.  Learned counsel for the sole respondent appears and  

takes notice. Hence notice waived.

3.  Appeal admitted.

4.  The issue raised in this appeal lies in a very narrow  

compass.  Therefore, by consent of the learned counsel  

for the parties to the  lis,  the matter is taken up for  

final hearing.

5.  The issue in this appeal is, whether  penalty and  

interest can be levied and collected when the duty has  

been paid before the issue of Show Cause Notice under the  

provisions of the Central Excise Act, 1944 (‘the Act’ for  

short).

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6.  In the present case, it is the stand of the assessee  

that the assessee had paid the duty under the provisions  

of the Act before the issue of the Show Cause Notice and,  

therefore,  not  liable  for  the  payment  of  penalty  and  

interest on the duty so paid under Section 11 AC of the  

Act.

7.  The Tribunal, accepting the stand of the assessee and  

by relying on the observations made by this Court in the  

case  of  Rashtriya  Ispat  Nigam  Ltd.  Vs.  CCE.,  

Visakhapatnam, 2004 (163) ELT A 53 (SC), has allowed the  

assessee's   appeal   and   has set aside the demands  

raised  by  the  Revenue  for  payment  of  penalty  and  

interest.  The Revenue, being aggrieved by the orders  

passed by the Tribunal, is before us in this appeal.

8.  Mr. R.P. Bhatt, learned counsel appearing for the  

Revenue,   would  submit  that  the  issue  raised  in  this  

appeal is now squarely covered by the decision of this  

Court in Union of India Vs. Dharmendra Textile Processors  

& Ors., (2008) 13 SCC p.369 and, therefore, submits that  

the judgment and orders passed by the Tribunal requires  

to be annulled by this Court. Per contra, learned counsel  

appearing for the assessee would submit that though the  

issue is now covered by the decision of this Court in the  

case of Dharmendra Textile Processors (supra), the matter  

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requires  to  be  remitted  to  the  Tribunal  for  fresh  

consideration  and  decision.   In  this  connection,  the  

learned counsel invites our attention to para 20 of the  

judgment in Dharmendra Textile Processors (supra).

9.  This Court, in the aforesaid cited decision after  

considering the effect of Section 11 AC of the Act, has  

come to the conclusion that the view expressed in Dilip  

N. Shroff Vs.  C.I.T., (2007)6 SCC 329 is not correctly  

decided and accordingly has accepted the view taken in  

S.E.B.I. Vs.  Cabot  International  Capitals  Corporation,  

(2006) 5 SCC 361.  After doing so, the three Judge Bench  

of this Court thought it fit to set aside the orders  

passed by the High Court and the Tribunal and remitted  

the matter to the High Court/Tribunal, as the case may  

be, for fresh adjudication in the light of the decision  

of  this  Court  in  Dharmendra  Textile  Processors  case  

(supra).

10.  In view of the above, we are left with no other  

alternative but to set aside the orders passed by the  

Tribunal in Appeal No.E/711/03 dated 16.8.2005 and remit  

the matter to the Tribunal for its fresh consideration  

and decision.  We also make it clear that the Tribunal  

now will decide the issue afresh, keeping in view the  

observations  made  by  this  Court  in  Dharmendra  Textile  

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Processors case (supra).

11.  With these observations and directions, the appeal  

is disposed of. No costs.

...................J. (H.L. DATTU)

...................J. (ANIL R. DAVE)

NEW DELHI; FEBRUARY 22, 2012  

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