2009 (1) TMI 614 - AT - Central Excise

Summary

Issues involved: Interpretation of Sections 11D, 11AC, and Rule 173Q of the Central Excise Rules, 1944 regarding imposition of penalty.

Summary:
The appellant challenged a Show Cause Notice issued for recovery of an amount u/s 11D of the Central Excise Rules, 1944. The impugned order did not specify the section under which the demand was confirmed but referenced the Show Cause Notice, indicating confirmation u/s 11D. The appellant argued that no penal provision under 11AC or Rule 173Q was invoked for penalty imposition. The appellate stage allowed raising legal arguments not presented earlier.

The Department imposed a penalty on the appellants for not submitting a price list and declaring the correct price to the Department, despite charging customers a higher price.

Upon review, the Tribunal noted the order confirmed the demand of Central Excise Duty without specifying the section, but the Show Cause Notice mentioned non-compliance with Section 11D and appropriation of the paid amount. As the duty was appropriated u/s 11D, penalties under 11AC or Rule 173Q were deemed inapplicable since the demand was not due to undervaluation. The Tribunal concluded that penalties were not justified, setting aside the penalty amount and allowing the appeal for refund of the pre-deposited penalty amount.