my blog

In penalty matter under the Central Excise Act, 1944 in the case of Union of India & Others v. Dharmendra Textile Processors & Others, (2007) 295 ITR 244 the Bench of two Judges of the Supreme Court doubted the judgment of other two Judges of the Supreme Court in Dilip N. Shroff v. JCIT, (2007) (291 ITR 519); but because one Coordinate Bench (which means the Bench of the same strength of Judges) cannot over-rule the decision of another Coordinate Bench, they recommended the formation of Larger Bench to the Hon’ble Chief Justice of India. Accordingly, the matter was referred to the Larger Bench of three Judges. The decision of the Larger Bench of three Judges is reported as Union of India & Others v. Dharmendra Textile Processors and Others, (2008) 306 ITR 277. In the said decision the Larger Bench held at page 302 that “the object behind the enactment of S. 271(1)(c) read with the Explanations indicates that the said Section has been enacted to provide for a remedy for loss of revenue. The penalty under the provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution u/s.276C of the Income-tax Act.”