2004 (2) TMI 481 - AT - Central Excise

Summary

Issues:
Challenge to setting aside of penalty imposed on respondents by Commissioner (Appeals).

Analysis:
The appeal before the Appellate Tribunal was filed by the Revenue against the order of the Commissioner (Appeals) challenging the setting aside of the penalty imposed on the respondents. The appellants had manufactured and cleared paints remover without payment of duty under sub-heading No. 3814.00 of CETA. Upon notification of this, the respondents promptly paid the duty, claiming they were unaware of the goods' excisability. The Commissioner (Appeals) found no mala fide intent on the respondents' part as they maintained proper records, which were presented to the departmental officers for verification. Consequently, the penalty was set aside by the Commissioner (Appeals).

The Commissioner (Appeals) noted that penal provisions under Section 11AC were not applicable as the duty was paid before the issuance of the show cause notice. However, the Appellate Tribunal emphasized that the imposition of penalty hinges on the specific circumstances of each case. In this instance, it was undisputed that the respondents acted in good faith, believing the goods were non-excisable, and diligently maintained accurate records. Moreover, the duty was paid prior to the show cause notice. Considering these factors, the Tribunal agreed with the Commissioner (Appeals) that penalizing the respondents was unwarranted. Therefore, the Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the Revenue's appeal.