2009 (3) TMI 675 - AT - Central Excise

Summary

Issues involved: Realization of penalty u/s 11AC of Central Excise Act, 1944 based on show-cause notice dated 21-6-2006 without specific charges mentioned.

Summary:

Issue 1: Realization of penalty u/s 11AC without specific charges:
The Appellate Tribunal CESTAT, New Delhi heard the appeal regarding the imposition of penalty under Section 11AC of the Central Excise Act, 1944. The Revenue appealed for the realization of the penalty as per the show-cause notice dated 21-6-2006, even though duty had been paid before the notice was issued. The Appellant objected, stating that the show-cause notice did not specify the reasons for the penalty, as required by the proviso to Section 11A of the Act. The Appellant argued that penalty under Section 11AC can only be levied if the ingredients of the proviso to Section 11A are clearly mentioned in the notice. The absence of specific charges in the notice entitles the Appellant to relief, citing relevant court decisions. The Tribunal found that the show-cause notice did not explicitly state the intention to evade payment of duty based on the proviso to Section 11A, thus depriving the Appellant of the opportunity to defend against the charges. Consequently, the Tribunal dismissed the Revenue's appeal in line with the Apex Court's decisions, emphasizing the importance of clearly outlining charges in show-cause notices to ensure due process of justice.

Final Decision:
The Tribunal dismissed the Revenue's appeal for the realization of penalty under Section 11AC of the Central Excise Act, 1944, as the show-cause notice failed to specify the intention to evade payment of duty in accordance with the proviso to Section 11A, thereby depriving the Appellant of a fair opportunity to defend against the charges.