2010 (3) TMI 58

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..... been found that there was clandestine removal of the material? –held that - Even if duty is deposited prior to the show cause notice, the liability to the penalty cannot be wiped out under Section 11AC of the Central Excise Act, 1944. It has further been held that once liability to pay duty is established then there is no discretion to the department to reduce the penalty under Section 11AC of th .....

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..... of this Court: i) Whether the penalty imposed under Section 11AC of the Central Excise Act, 1944 can be reduced in a case where it has been found that there was clandestine removal of the material? A perusal of the impugned order passed by the Tribunal shows that it is categorically held that there was clandestine removal of the goods, which was duly corroborated by the shortage of raw material .....

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..... er Section 11AC of the Central Excise Act, 1944. In view of the above, once the department has found clandestine removal of raw materials and finished goods, then there is no discretion left to reduce the penalty. Resultantly, the question posed in this appeal is answered in favour of the revenue and against the assessee. For the foregoing reasons this appeal is allowed and order (Annexure P-3) .....

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