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TMI Blog2009 (9) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... The facts of the case are that the assessee- M/s.Him Chemicals & Fertilizers Limited, Village Maganpura, Nalagarh is engaged in the manufacture of fence fittings and scaffolding for which zinc metal and aluminum alloys are the raw material. The Central Excise staff visited the industrial premises of the assessee. On physical verification, it was found that though the finished goods tallied with the records, there was a shortage in the inputs, i.e., zinc metal and aluminum alloys which were subject to central excise and VAT duties. The Department, therefore, came to the conclusion that raw material which was liable to central excise and VAT had been removed from the factory premises clandestinely. Before issuing notice to the assessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Act. We have considered rival contentions and perused the record and statutory provisions. Provisions of Section 11AC of the Act providing for penalty reads as under:- "11AC. Penalty for short-levy or non-levy of duty in certain cases.- Where any duty of excise has not been levied or paid or has been hortlevied or short-paid or erroneously refunded by reasons of fraud, collusion or any willful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intent to evade payment of duty, the person who is liable to pay duty as determined under sub-section(2) of section 11-A, shall also be liable to pay a penalty equal to the duty so determined: Provided that wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uations 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. It would be apposite to refer to a judgment of the Apex Court delivered in Sony India Ltd. v. Commissioner of Central Excise, Delhi, 2004 (167) ELT, 385 (S.C) wherein the Apex Court held that where the assessee is guilty of taking an action which is not bona fide then penalty can be imposed. This would also be in consonance with the settled principle of law that a person who is guilty of trying to evade duty by mala fide methods should not be given the benefit of not having to pay penalty when hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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