2009 (6) TMI 860 - AT - Central Excise

Summary

Issues:
- Appeal against duty demand confirmation and penalty imposition under Section 11AC.

Analysis:
The appeal was filed by the Revenue against an order-in-appeal confirming duty demand but setting aside the penalty under Section 11AC. The case involved a manufacturer of thermometers who failed to pay duty on thermometers supplied as free replacements or gifts. The appellant immediately paid the duty upon discovery during a stock taking. The Assistant Commissioner confirmed the duty demand along with interest and imposed a penalty under Section 11AC. However, the Commissioner (Appeals) set aside the penalty based on the duty and interest being paid prior to the show cause notice. The Revenue argued that penalty should still apply based on legal precedents from different High Courts.

Upon review, the Tribunal found that the case did not involve clandestine removal or deliberate evasion of duty. The issue was the underpayment of duty due to a mistaken belief regarding the value. The Tribunal held that the circumstances did not meet the conditions for invoking Section 11AC. Therefore, it was determined that the penalty under Section 11AC was not warranted in this case. Consequently, the Tribunal upheld the order setting aside the penalty and dismissed the Revenue's appeal.

In conclusion, the Tribunal's decision was based on the specific facts of the case, which did not align with the requirements for imposing a penalty under Section 11AC. The judgment emphasized the importance of assessing each case individually to determine the applicability of penalties under relevant legal provisions.