QUESTION

Whether separate penalty under Sections 77(1)(c)(i) and 77(1)(c)(ii) under Finance Act are imposable? Separate penalty under these two sub-sections can`t be imposed as the formation of the section stipulates that penalty to the maximum limit will be imposed and it covers any one or all the violations under section 77(1)(c).

ANSWER

FACTS OF THE CASE:
To check whether the penalty specified u/s 77(1)(c) can be imposed separately clause wise for each and every violation.

LAW APPLICABLE:
Section 77(1)(c) is reproduced hereunder;

"(c) who fails to'

(i) furnish information called by an officer in accordance with the provisions of this Chapter or rules made thereunder; or

(ii) produce documents called for by a Central Excise Officer in accordance with the provisions of this Chapter or rules made thereunder; or

(iii) appear before the Central Excise Officer, when issued with a summon for appearance to give evidence or to produce a document in an inquiry, shall be liable to a penalty which may extend to ten thousand rupees or two hundred rupees for every day during which such failure continues, whichever is higher, starting with the first day after the due date, till the date of actual compliance;"

INTERPRETATION:
The construction of section 77(1)(c) is to penalise the defaulters mentioned in it's three sub clauses. On an analysis of these clauses one can understand that this sub section aims to cover in it's ambit those "defaulters who fail to produce information".
The intention of the law maker at the time of framing of the law was to penalise defaulters who fail to produce information called upon by an officer or who fail to appear before the officer when a summons is issued. All the three sub clauses address defaults of the same nature.
By applying the rule of Beneficial Construction of law while doing interpretation of statutes where there are two or more interpretations of law possible then the interpretation that is more beneficial to the assessee shall prevail.
Therefore it is only just to apply the penalty u/s 77(1)(c) only once for the offences mentioned under this sub section and not clause wise.

CONCLUSION:
Penalty u/s 77(1)(c) should not be applied separately for clause (i), (ii) and (iii)  (Reply dt. 01/09/2021)