2004 (2) TMI 151 - AT - Central Excise

Summary

Issues:
1. Imposition of penalty under Section 11AC for alleged clandestine removal of excisable goods without payment of duty.
2. Levying of interest under Section 11AB on the duty amount.
3. Conflict of decisions on penalty imposition when duty is deposited before the show cause notice.

Analysis:
1. The case involved a discrepancy in entries related to the clearance of goods in the Balance Sheets and RG-1, leading the Central Excise department to suspect clandestine removal of excisable goods without duty payment. A show cause notice was issued, but the party had already paid the duty amount in question. The original authority imposed a penalty under Section 11AC and demanded interest under Section 11AB. The Commissioner (Appeals) later allowed the party's appeal, prompting the Revenue to file the present appeal.

2. The Revenue argued that even if duty is paid before the show cause notice, penalty under Section 11AC is applicable based on findings of fraud or suppression. They cited precedents to support their stance. However, the respondent's advocate referred to contrary decisions by other benches in similar cases, highlighting the conflicting interpretations within the Tribunal.

3. The key issue was whether a penalty under Section 11AC and interest under Section 11AB could be imposed when duty was paid before the show cause notice. The conflicting decisions presented by both sides necessitated resolution by a Larger Bench to address the inconsistency. The case was referred to the Hon'ble President for further consideration and clarification to resolve the conflicting interpretations within the Tribunal.