2006 (11) TMI 513 - AT - Central Excise

Summary

Issues involved: Appeal against penalty imposed under Sec. 11AC of the Central Excise Rules, 1944 for clandestine removal of goods without payment of duty.

Summary:
The appeal was made against the penalty imposed on the respondent company under Sec. 11AC by the Commissioner of Customs and Central Excise (Appeals), Daman. The respondents received brass scrap, converted them into brass rods, and sent them back without proper central excise invoices or duty payment. The Commissioner (A) accepted the plea that duty was paid before the show cause notice was issued, citing a relevant judgment. However, the High Court reversed its decision in a similar case, emphasizing the seriousness of outright clandestine removal.

The Tribunal noted that the show cause notice had been issued, adjudicated, and appealed, making the claim of not issuing the notice belated. The applicant admitted to outright clandestine removal, which cannot be excused. Allowing an evader to pay only duty after being caught would create a risk-free environment for tax evasion. Therefore, the decision to set aside the penalty under Sec. 11AC was overturned, restoring the original authority's order.

In conclusion, the Commissioner (A) order setting aside the penalty was modified, and the original authority's decision was fully reinstated.