2010 (2) TMI 997 - AT - Central Excise

Summary

Issues:
Waiver of penalty under Section 11A of the Central Excise Act, 1944.

Analysis:
The Revenue appealed against the waiver of penalty by both authorities, contending that a stock discrepancy and shortage of raw material leading to duty loss of Rs. 1,27,224 should have invoked Section 11A of the Act, thereby necessitating the application of Section 11AC for penalty imposition. The Revenue argued that the authorities erred in not imposing the penalty.

The Respondent's counsel argued that the case did not prejudice Revenue's interest as per the concurrent findings of the authorities, and there was no evidence of mala fide conduct by the assessee. The cooperation of the assessee in discharging duty liability and lack of findings on fraud, collusion, or suppression of facts meant that penalties should not be levied. The authorities found no evidence of clandestine removal of goods, and the duty liability was discharged before the show-cause notice, invoking Section 11A(2B) for immunity from penalties.

Upon review, the Adjudicating Authority and the Appellate Authority agreed that there was no evidence of clandestine removal of goods. The case indicated the assessee's cooperation in discharging duty liability, but it was unclear if the case fell under the proviso to Section 11A(1) for immunity under Section 11A(B) from penalties. Since there was no finding of mala fide intent by the assessee to trigger the proviso to Section 11A(1), the waiver of penalty by the authorities was upheld, and the appeal by Revenue was dismissed.

In conclusion, the judgment upheld the waiver of penalty under Section 11A of the Central Excise Act, 1944, based on the lack of evidence of mala fide intent by the assessee and the timely discharge of duty liability, leading to the rejection of Revenue's appeal.