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2018 (9) TMI 636 - AT - Central ExcisePenalty u/s 11AC of the Central Excise Act, 1944 - area based exemption as per N/N. 56/2002-CE dt. 14.11.2002 - Held that - Nowhere it is coming out that the impugned goods on which erroneous refund has been sanctioned to the appellant have ever reached Jammu & Kashmir state with documentary evidence and there is any manufacturing activity took place in the state of Jammu & Kashmir. In these circumstances, onus lies on the appellant to prove that the goods came to Jammu and they did some manufacturing activity on the said goods in Jammu. Admittedly, the appellant has failed to do so and has not paid the penalty as directed by the adjudicating authority in the impugned order. In these circumstances, the appellant is liable to pay the penalty to the tune of 100% of the duty under Section 11AC of the Act - appeal dismissed - decided against appellant.
Issues:
Penalty under Section 11AC of the Central Excise Act, 1944 imposed on the appellant for erroneous refund claimed. Analysis: The appellant, located in Jammu & Kashmir, availed exemption under Notification No. 56/2002-CE and claimed self-credit on duty paid through PLA. Goods were imported, sent to Gujarat, then to Chennai for processing and export, with duty paid in Jammu. Investigation revealed no goods reached Jammu, no manufacturing occurred there. Show cause notice demanded duty, interest, and penalty under Section 11AC. Appellant paid erroneous refund and interest before adjudication. Adjudicating authority allowed 30 days to pay reduced penalty of 25% or face 100% penalty. Appellant contested penalty imposition. The appellant argued no malafide intent for erroneous refund, claiming goods reached Jammu and were sold there, but lacked transportation papers. Tribunal noted absence of evidence showing goods reached Jammu or manufacturing occurred there. Onus was on the appellant to prove goods' arrival and manufacturing in Jammu, which they failed to do. As penalty was not paid as directed, appellant was held liable for 100% penalty under Section 11AC. Tribunal upheld the penalty imposition, finding no error in the impugned order. In conclusion, the appeal was dismissed, affirming the imposition of a 100% penalty under Section 11AC of the Central Excise Act, 1944 on the appellant for the erroneous refund claimed.
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