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Issues Involved:
Imposition of penalty under Rule 173Q for duty evasion where duty was deposited before issuance of show cause notice. Analysis: The appeal before the Appellate Tribunal CESTAT, New Delhi involved the imposition of penalty on the respondents under Rule 173Q for duty evasion, despite the duty being deposited by the respondents before the issuance of the show cause notice. The Commissioner (Appeals) had set aside the penalty based on the premise that the duty was voluntarily deposited by the respondents before the notice, citing legal precedents like Karnal Agricultural Industry P. Ltd. v. CCE, Delhi-III and Ashok Leyland Ltd. v. CCE, Chennai. Upon review, the Tribunal noted that the shortage of finished goods was detected by Central Excise officers during a physical verification, and the respondents had voluntarily deposited the duty of Rs. 29,614. However, the Tribunal disagreed with the Commissioner's decision, stating that the duty deposit was not voluntary as it was made after the detection of the shortage. The Tribunal emphasized that the respondents would have evaded duty if the officers had not discovered the shortage, indicating a clandestine removal of goods. The Tribunal highlighted that the intent of the law is not to shield assessees who evade duty and then deposit it after being caught. It was determined that the respondents should be penalized under Rule 173Q for removing goods without paying duty, resulting in a shortage of 8300 Kgs. Therefore, the Tribunal set aside the Commissioner's order and upheld the penalty imposed by the adjudicating authority, ruling in favor of the Revenue in this case.
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