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The Department has sought to invoke the proviso to Section 11A (1) and have relied on the observations as made by the Apex Court in the case of Union of India & Others Versus Dharmendra Textile Processors & Others since reported in (2008) 13 Supreme Court Cases 369 and, in particular, what is said in paragraphs 19 and 20 of the reports. What is submitted by Patna High Court CWJC No.929 of 2009 dt.14-03-2012 the Department, if we have understood it clearly, is that once escapement of duty is established then it has to be recovered alongwith penalty and penal interest. At the very outset, we may point out that apparently, relying on the language used in the case of Dharmendra Textile Processors (supra), they submit that the provisions are mandatory and recoveries with penalty and penal interest leaves them no discretion in the matter. This is apparently not correct. These provisions of extended period of limitation, penalty and penal interest, as envisaged under proviso to Section 11A (1), Section 11 AC and Section 11AB respectively, come into play only upon finding that the assessee knowingly and deliberately tried to evade tax and not merely by reason of tax being short levied. Here, we may point out that in the case of Rajasthan Spinning and Weaving Mills (supra), the Apex Court considered virtually the same argument of the Department in the case of Dharmendra Textile Processors (supra) with the aid of Dharmendra Textile Processors (supra) and clearly pointed out as under:

Then they noticed the observations, as made in Patna High Court CWJC No.929 of 2009 dt.14-03-2012 Dharmendra Textile Processors (supra) in paragraphs 31 and 32 of the reports in relation to Rajasthan Spinning and Weaving Mills (supra) and held thus:

"From the above, we fail to see how the decision in Dharamendra Textile can be said to hold that Section 11-AC would apply to every case of non-payment or short-payment of duty regardless of the conditions expressly mentioned in the section for its application. There is another very strong reason for holding that Dharamendra Textile could not have interpreted Section 11-AC in the manner as suggested because in that case that was not even the stand of the Revenue."