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TMI Blog2014 (5) TMI 792X X X X Extracts X X X X X X X X Extracts X X X X ..... of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty shall also be liable to pay penalty equal to the duty so determined. The assessee is also liable to pay interest for the period in question - CESTAT was not correct in their finding that payment of differential duty before issuance of show cause notice would put an end to the penalty proceedings initiated against the assessee. Therefore, the said finding is liable to be set aside - However penalty reduced to 25% - Decided partly in favour of Revenue. - C.M.A. No. 2960 of 2007 - - - Dated:- 21-9-2011 - D. Murugesan and K.K. Sasidharan, JJ. Ms. P. Bhuvaneswari, SCGSC, for the Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and remitted the matter to decide the question regarding levy of penalty. In short, the matter was remanded with a direction to the Original Authority to re-work the penalty under Section 11AC from the date of introduction of Section 11AC up to October and collect the sum proportionately from the assessee. Penalty levied by the Original Authority under Rule 173Q was reduced. 3. The order dated 8 March 1999 on the file of the Commissioner (Appeals) was the subject matter of a separate appeals at the instance of the Commissioner of Central Excise and the assessee. 4. The CESTAT accepted the valuation done by the assessee and the demand of difference duty raised by the Original Authority. The CESTAT however allowed the appeal holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l duty before the issuance of show cause notice. 9. Section 11AB deals with interest on delayed payment of duty. Similarly Section 11AC deals with penalty for short-levy or non-levy of duty in certain cases. Both these provisions indicate that in case the duty has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reasons of fraud, collusion or any wilful mis-statement or suppression of facts, or contravention of any of the provisions of the Central Excise Act or the Rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty shall also be liable to pay penalty equal to the duty so determined. The assessee is also liable to pay interest for the period in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finding that payment of differential duty before issuance of show cause notice would put an end to the penalty proceedings initiated against the assessee. Therefore, the said finding is liable to be set aside. 14. The substantial question of law is therefore decided in favour of the revenue and against the assessee. 15. The original Authority instead of applying the first proviso to Section 11AC, determined the penalty. The said direction appears to be against the spirit of the provision. Therefore, we are of the view that the assessee is liable to pay penalty only at 25% of the duty determined by the Original Authority. 16. The order passed by the CESTAT is set aside. The order passed by the Original Authority is restored with mod ..... X X X X Extracts X X X X X X X X Extracts X X X X
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