2009 (2) TMI 691 - AT - Central Excise

Summary

In the Appellate Tribunal CESTAT, New Delhi case of Revenue vs. Respondent, the Revenue appealed against an order-in-appeal passed by CCE (Appeals), Raipur. The Respondents were found to have issued 26 parallel invoices for clearance of Sulphuric Acid without paying Central Excise Duty. The total duty involved was Rs. 1,69,699, which the Respondent accepted and paid along with Education Cess. A show cause notice was issued, and the Assistant Commissioner confirmed the duty demand and imposed a penalty of Rs. 5,000. On appeal, the penalty was enhanced to Rs. 50,000 by the Commissioner (Appeals) based on Tribunal judgments. The Department appealed this decision, seeking a penalty equal to the duty evaded. The Respondents filed a cross-objection.

The Department argued that the penalty should be equal to the duty evaded due to deliberate evasion. The Respondent contended that as the duty had been paid before the show cause notice, the penalty should be limited to 25% of the duty as per the first proviso to Section 11AC. The Commissioner (Appeals) penalty of Rs. 50,000 was deemed appropriate. The Tribunal upheld the penalty decision, stating that the penalty was in accordance with the law and dismissed the Revenue's appeal. The Respondent's cross-objection was also disposed of accordingly.