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TMI Blog2005 (7) TMI 139X X X X Extracts X X X X X X X X Extracts X X X X ..... such to the 'S' unit in February 2003. This transfer was not accompanied by payment of duty in any manner. Sub-rule (3) of Rule 3 of the Cenvat Credit Rules, 2002 enabled the assessee to utilize Cenvat credit for payment of duty on capital goods so transferred. This facility, however, was not made use of by the assessee at the time of clearance of the machinery. Officers of Central Excise who visited the 'G' unit on 5-3-2003 detected this omission. The next day, the party paid duty on the above capital goods and also paid interest for the period of delay. Later on, the department issued show cause notice, dated 3-12-2003, for imposing penalty on the assessee under Section 11AC of the Central Excise Act. This proposal was contested. The orig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest was paid by the assessee. A penalty to the extent of Rs. one lakh has been imposed on the assessee under Section 11AC. 4. Ld. Counsel for the assessee submits that as the duty was paid prior to issue of show cause notice, no penalty is liable to be imposed under Section 11AC. In this connection, he relies on the following decisions of the Tribunal : (1) BPL Sanyo Utilities Appliances Ltd. - 2002 (140) E.L.T. 249 (Tri. - Bang.) (2) EID Parry (I) Ltd. - 2003 (156) E.L.T. 753 (Tri. - Chennai) (3) CCE, Delhi-III v. Machino Montell (I) Ltd. - 2004 (168) E.L.T. 466 (Tri.- LB) = 2004 (114) ECR 894 (Tri.-LB) (4) Lakshmi Machine Works - 2005 (121) ECR 120 (Tri.-Chennai) On the other hand, ld. SDR submits that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , nor was Section 11AC made applicable to cases of delayed payment of duty under the said scheme. Hence I am of the view that Section 11AC was not attracted. In the circumstances, it is not necessary to examine the case law cited by both the sides, though it may be relevant to point out that the Hon'ble Supreme Court has reaffirmed the legal position that, where payment of duty is made prior to issue of show cause notice, no penalty is normally imposable on the assessee. Here is a normal case and hence the assessee can legitimately claim support from the case law cited by their counsel. On the other hand, the Supreme Court's decision cited by ld. SDR does not apparently have any bearing on the issue raked up in this case. In that case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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