2014 (3) TMI 487 - AT - Central Excise

Penalty under section 11AC read with Rule 25 of the Central Excise Rules, 2002 - Held that - As per the decision of Rajasthan Spinning & Weaving Mills 2009 (5) TMI 15 - SUPREME COURT OF INDIA , the Apex Court has held that if the ingredients of Section 11AC of the Act have been attracted, then the mandatory penalty under section 11AC is imposable. Admittedly, there is no allegation of fraud, collusion, willful mis-statement, suppression of fact or contravention of provisions with intent to evade payment of duty against the respondent. Therefore, provisions of section 11AC is not attracted. In the absence of such an allegation, penalty is not imposable - Decided against Revenue.

Summary

The Appellate Tribunal CESTAT MUMBAI upheld the impugned order dropping the mandatory penalty under section 11AC as the provisions were not attracted in the show-cause notice. The Apex Court ruled that penalty is imposable only if the ingredients of Section 11AC are met, such as fraud or willful misstatement. Since there were no such allegations against the respondent, the penalty was not imposed. The appeal of the revenue was dismissed.