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TMI Blog2006 (7) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... 416/04/NB/SM which in turn arises out of an order-in-appeal No. IND/1/563/2003, dated 8.10-2003, passed by Commissioner (Appeals). Facts of the case lie in a narrow compass. They however need mention in brief to appreciate the contentions urged. 2. The appellant is an assessee. They are engaged in the business of manufacture and sale of Plastic Processing Plants and machinery and parts. These goods are excisable and fall under Chapter 84 of First Schedule to the Central Excise Tariff Act, 1985. 3. The appellants were availing SSI exemption up to the aggregate value of clearance of Rs. 30 lac. However, during the financial year 1997-98, the turnover of assessee exceeded the exemption limit by Rs. 53,31,568/- thereby involving payment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile setting aside of the order passed by Commissioner of Appeals restored that of Adjudicating Authority. However, the Tribunal while upholding the imposition of penalty on the assessee under Section 11AC interfered in its quantum and reduced the same to Rs. 50,000/- in place of Rs. 2,26,578/- which was imposed by A.O. In other words, the Tribunal proceeded to impose a penalty of Rs. 50,000/- on assessee thereby granted them substantial relief in the quantum of penalty as against what was imposed by A.O. i.e. Rs. 2,26,578/-. It is against this order of Tribunal which has resulted in upholding of imposition of penalty though to the extent of Rs. 50,000/-, the assessee has felt aggrieved and filed this appeal. 5. Heard Shri Ramesh Nair, lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her they had crossed the exemption limit or not. The fact that they paid the duty before the issuance of the show cause notice could be used as a mitigating circumstance for imposing a lesser penalty than the penalty equal to the amount of duty. But could not be made basis for setting aside the penalty in toto, under Section 11AC by the Commissioner (Appeals). The payment of duty by the respondents can not be said to be voluntary in the eyes of law as they did not of their own pay the duty but paid only when they were caught by the Department. The provisions of Section 11AC are mandatory and as such in a case of evasion/non-payment of duty, penalty has to be imposed under the said section. On the delayed payment of duty, the respondents are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these facts were very much within the knowledge of assessee they did not pay and instead continued to enjoy the exemption facility though not eligible. In such situation, a clear case of breach of Section 11 of the Act was made out and in consequence a case for taking penal action for imposition of penalty for non-levy of duty within the meaning of Section 11AC was made out against the appellant. In other words, if the assessee fails to pay duty or short-paid then the provisions of Section 11AC gets attracted. In this case, since appellant failed to pay any duty on the goods at the time of clearance after the date when they crossed the limit of Rs. 30 lac, a case for invocation of penalty as contemplated under Section 11 AC stood made out e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant are distinguishable. In those cases, their Lordships did not examine the scope of Section 11AC but only held that case does not involve any substantial question of law for entertaining the appeal which was dismissed in limine. In these circumstances, their Lordship did not answer the question urged by learned Counsel for the appellant in this case. 12. In our view, the appellant has been given substantial relief because the Tribunal has reduced the penalty and confined it to Rs. 50,000/-. In this way, the appellant has partly succeeded so far as the quantum issue is concerned. This was done because the appellant had deposited the duty prior to issuance of show cause. Had they not done so, then they would have been saddled with ful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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