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TMI Blog2008 (2) TMI 747X X X X Extracts X X X X X X X X Extracts X X X X ..... ring and clearing Chenille Fabrics without payment of duty. The said officers recorded the statement of the representative of the appellants. On 30-10-2002, the appellant informed that they have decided to pay the duty along with interest on the entire quantity manufactured by them up to 31-8-2002 and they paid the duty along with interest. A show cause notice dated 26-2-2003 was issued proposing the demand of duty and imposition of penalty and interest. The adjudicating authority confiscated the seized goods and an option was given to redeem the said goods on payment of fine of Rs. 50,000/-. He has also confirmed the demand of duty and appropriated the said amount as deposited by the appellant before issue of the show cause notice. No pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and on perusal of the records, it is seen from the adjudication order that there was bona fide mistake on the part of the appellant. The adjudicating authority observed that the appellants manufacturing unit had been issuing regular challans to their sister concern in Delhi, who in turn, was selling the goods on regular invoice. These records were being submitted to the other Government Departments also. So, the adjudicating authority observed that there was no suppression of fact or wilful evasion of duty is established against the appellants and they are entitled to benefit of deemed credit on the inputs used in the manufacture of Chenille Fabrics. The Commissioner (Appeals) disallowed the deemed credit on the ground that the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egligence of the manufacturer either not to take out a licence or not to pay duty in case where there was scope for doubt, does not attract the extended limitation. The learned Jt. CDR relied upon the decision of the Hon ble High Court in the case of Omkar Steel Tubes (P) Ltd., (supra) wherein, it has been held that mere fact that duty has been deposited before issue of show cause notice would not result in non-application of Section 11AC of the Central Excise Act, 1944 and penalty could still be imposed as long as various elements envisaged by Section 11AC are satisfied indicating presence of mens rea. In the present case, the adjudicating authority dropped the penalty after considering the conduct of the party in detail. Taking into accou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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