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TMI Blog2007 (7) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... l questions of law. (1) Whether imposition of penalty as u/s 11-AC of the Central Excise Act, 1944 is mandatory so far as evasion of excise duty is concerned ? (2) Whether imposition of penalty is necessary even if evaded excise duty is paid by the assessee, before service of show cause notice ? 2. Heard respective counsel. 3. In this matter, officers of the department on visit to the premises of respondent - assessee on 7.9.2001 and after verification of the record and stock, arrived at a conclusion that assessee had short paid duty of Rs.1,51,143/-. Show cause notice dated 26.2.2002 was issued. However, immediately after detection on 7.9.2001, the assessee had reversed the CENVAT credit accordingly claimed and had also paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Punjab and Haryana High Court reported at 2006 (202) E.L.T.398 ( P H) - Commissioner of Central Excise, Delhi-III V/s Machino Montell (I) Ltd . Punjab Haryana High Court observed thus in paras 7 9 : "7. A perusal of the above provision, shows that the said provision incorporates liability to pay penalty in the situations mentioned therein. Once a case is covered by the situation mentioned in the Section, mere deposit prior to issuance of show cause notice under Section 11A of the Act will not necessarily negate the situation mentioned in the said Section. 9. In view of the above, applicability of Section 11AC is not excluded at the threshold merely on deposit of the amount after having been caught and before the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned amicus curiae has also taken us to a judgment of another Division Bench of this High Court in the matter of Commissioner of Central Excise - I V/s Gaurav Mercantiles Ltd . (2005 (70) RLT 699 (Bom.). In this matter, Bombay High Court, after relying upon the decisions of Madras High Court in the case of CCE, Madras V/s Jkon Engineering (P) Ltd. (2005 (67) RLT 157 (Mad) and Karnataka High Court in the case of Commissioner of Central Excise, Mangalore V/s Shree Krishna Pipe Industries (2004 (165) ELT 508 and also the decision in the matter of Rashtriya Ispat Nigam Ltd ., took the view that no substantial question of law was involved in the case as the short duty was paid before issuance of show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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