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TMI Blog2011 (7) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... T dated 18th August 2004. At the time of admission of appeal, following question of law was framed : (1) Whether the Tribunal s order setting aside the mandatory penalty and interest especially when the intent to evade payment of duty is well established from the fact that duty amount confirmed by invoking extended period has been upheld and the duty evasion was detected by the Department and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. Be that as it may, even before the Department issued show cause notice for recovery of such unpaid dues, the dues were paid and the credit was reversed. 3. It appears that to the extent the assessee had used certain items for captive consumption without payment of duty valued at ₹ 2,46,000/- Department issued show cause notice 2-7-1998 under Section 11AC of the Central Excise Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the issue is decided by the Apex Court in their favour in the case of Union of India v. Dharamendra Textile Processors, 2008 (231) E.L.T. 3 (S.C.) wherein it was held that penalty under Section 11AC is required to be imposed without the necessity to prove mens rea. He submitted that merely because the assessee deposited the amount before issuance of show cause notice would not mean that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in view of the decision in the case of Rajasthan Spinning Weaving Mills (supra), explaining the decision in the case of Dharamendra Textiles, other defences of the assessee shall have to be examined. In other words, if the assessee can establish that it had sufficient reasons for not paying the duty and that there was no intention to evade duty, question of penalty under Section 11AC will ..... X X X X Extracts X X X X X X X X Extracts X X X X
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