Excise & Customs : If lower authorities and Tribunal, on appreciation of entire material on record, set aside penalty concurrently holding that there was no fraud, suppression, etc., same being a pure question of fact, High Court cannot interfere
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[2014] 51 taxmann.com 448 (Karnataka)
HIGH COURT OF KARNATAKA
Commissioner of Central Excise, Bangalore-III
v.
Sankala Industries*
N. KUMAR AND RAVI MALIMATH, JJ.
CENTRAL EXCISE APPEAL NO. 45 OF 2010†
SEPTEMBER 15, 2011
Section 11AC, read with section 35G, of the Central Excise Act, 1944, read with section 78 of the Finance Act, 1994 and section 114A of the Customs Act, 1962 - Penalty - For evasion of duty/tax - Assessee made clearances to sister concern paying duty based on prices charged from unrelated parties - Department argued that goods were to be valued at 110 per cent of cost of production and demanded duty with interest and penalty - Assessee paid duty with interest prior to issuance of notice - Commissioner (Appeals) and Tribunal held that penalty was not leviable, as : (a) undervaluation was merely due to ignorance of assessee and there was no fraud, suppression, etc. as goods were transferred by way of stock transfer and (b) even otherwise, situation was revenue neutral - HELD : Penalty is not automatic and is leviable only on conditions which are set out in section being fulfilled - If lower authorities and Tribunal, on appreciation of entire material on record, concurrently held that those conditions were not fulfilled, same being a pure question of fact, no interference was warranted - Hence, appeal was dismissed as no substantial question of law arose [Para 2] [In favour of assessee]
■■■
[2014] 51 taxmann.com 448 (Karnataka)
HIGH COURT OF KARNATAKA
Commissioner of Central Excise, Bangalore-III
v.
Sankala Industries*
N. KUMAR AND RAVI MALIMATH, JJ.
CENTRAL EXCISE APPEAL NO. 45 OF 2010†
SEPTEMBER 15, 2011
Section 11AC, read with section 35G, of the Central Excise Act, 1944, read with section 78 of the Finance Act, 1994 and section 114A of the Customs Act, 1962 - Penalty - For evasion of duty/tax - Assessee made clearances to sister concern paying duty based on prices charged from unrelated parties - Department argued that goods were to be valued at 110 per cent of cost of production and demanded duty with interest and penalty - Assessee paid duty with interest prior to issuance of notice - Commissioner (Appeals) and Tribunal held that penalty was not leviable, as : (a) undervaluation was merely due to ignorance of assessee and there was no fraud, suppression, etc. as goods were transferred by way of stock transfer and (b) even otherwise, situation was revenue neutral - HELD : Penalty is not automatic and is leviable only on conditions which are set out in section being fulfilled - If lower authorities and Tribunal, on appreciation of entire material on record, concurrently held that those conditions were not fulfilled, same being a pure question of fact, no interference was warranted - Hence, appeal was dismissed as no substantial question of law arose [Para 2] [In favour of assessee]
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