2005 (9) TMI 479 - AT - Central Excise

Summary

Issues:
1. Dropping of Section 11AC penalty by the Revenue.
2. Cross-objection against the demand of duty and imposition of Rule 173Q penalty.

Analysis:

Issue 1: Dropping of Section 11AC penalty
The appeal was by the Revenue challenging the dropping of the Section 11AC penalty. Both parties agreed that the duty covered by the notice was paid before its issuance, entitling the assessee to benefit from the case law stating no penalty under Section 11AC should be imposed if duty is paid before the notice. Consequently, the Revenue's appeal was dismissed.

Issue 2: Cross-objection against demand of duty and Rule 173Q penalty
The cross-objection was against the duty demand and Rule 173Q penalty. The case involved scrap generated at job workers' premises. The assessee claimed duty payment by their units or job workers. Disputes arose regarding duty payment and return of scrap. The original and appellate authorities differed on findings, especially regarding duty payment evidence. The assessee contended that proper scrutiny of accounts would reveal duty payment. However, lack of evidence led to sustained duty demands on various scrap quantities. The authorities also found non-compliance with Rule 57F procedures, justifying the penalty imposed under Rule 173Q. The judgment upheld the penalty and directed careful examination of evidence in further proceedings.

This detailed analysis covers the issues of dropping Section 11AC penalty and the cross-objection against duty demand and Rule 173Q penalty, providing a comprehensive understanding of the judgment's legal intricacies and outcomes.