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2006 (9) TMI 537 - AT - Central Excise
Issues: Waiver of penalty amount in Central Excise duty case.
Analysis: 1. Background: The case involves three appeals concerning the waiver of penalty amount in relation to Central Excise duty. The appellants were found with shortages of finished goods and inputs during a visit by Central Excise officers, leading to a confirmed duty payment of Rs. 1,08,925 on the same day. Subsequently, a Show-Cause-Notice was issued proposing penalties on the appellants and employees. 2. Contention of Appellants: The main argument of the appellants is that since the confirmed duty was paid before the Show-Cause-Notice was issued, imposing penalties on them is unjustified. They relied on various case laws to support their position, emphasizing that penalty and interest are not warranted when duty is paid prior to the notice. 3. Counter-Argument by Respondent: The respondent referred to a specific case where disputed duty was paid before the notice, indicating no fraud or suppression of facts. The respondent argued that in the present case, goods were removed clandestinely, making the exemption principles from other cases inapplicable. 4. Judicial Analysis: The Tribunal analyzed the precedents cited by both parties and observed that the principles laid down in those cases did not exclude situations involving clandestine removal or shortages. The Tribunal noted that the ratio applied equally to all cases without specific exceptions. 5. Decision: The Tribunal opined that the appellants should benefit from the exemption of penalty and interest by paying duty promptly, contrasting with those who pay after adjudication. Consequently, the Tribunal held that the penalty should be waived for all appellants, overturning the previous order and allowing all appeals. In conclusion, the Tribunal ruled in favor of the appellants, setting aside the penalty amount imposed by the Assistant Commissioner and Commissioner (Appeals) due to the prompt payment of confirmed duty, in line with established legal principles.
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