2009 (5) TMI 628 - AT - Central Excise

Summary

Issues involved: Appeal against penalty imposed under Section 11AC of Central Excise Act, 1944.

Summary:
The Revenue filed an appeal against the order of the Commissioner (Appeals) setting aside the penalty imposed under Section 11AC of the Central Excise Act. The case involved a visit by Central Excise officers to the respondent's factory where a shortage of raw materials involving central excise duty was detected. The Commercial Manager accepted the shortage but failed to provide reasons. The original authority confirmed the duty demand and imposed a penalty under Section 11AC. The Commissioner (Appeals) set aside the penalty, leading to the Revenue's appeal.

The learned DR argued that the lack of reasons indicated clandestine removal of goods, citing a relevant court decision. However, the respondent's Advocate pointed out a similar case where the penalty was set aside due to the inability to explain the shortage. In the present case, as no reasons were provided for the shortage and no evidence of clandestine clearance was found, the imposition of penalty under Section 11AC was deemed unwarranted. Consequently, the appeal by the Revenue was rejected, upholding the Commissioner (Appeals) decision.