Penalty for excise shortage remained sustainable despite duty payment after detection when mala fide intention was not negated.

Penalty for shortage of finished goods remained sustainable even though the duty was debited in the PLA after detection by Central Excise officers. The shortage against the RG-1 register and the duty liability on the goods found short were admitted, and post-detection payment did not, by itself, negate liability to penalty. No legal provision was shown to establish that payment after detection automatically bars penalty. The cited precedent was distinguished because the facts did not show absence of mala fide intention, and the penalty was upheld.

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Issues: Whether penalty was sustainable when the duty on the shortage of finished goods was debited in the PLA after detection by the Central Excise officers.

Analysis: The shortage of finished goods vis-a -vis the RG-1 register was not in dispute, and the duty liability on the goods found short was also admitted. The debit of duty in the PLA after the discrepancy was pointed out did not, by itself, negate liability to penalty. No legal provision was shown to support the contention that payment of duty after detection automatically bars penalty. The reliance on the cited precedent was distinguished on the basis that the present facts did not show absence of mala fide intention.

Conclusion: The penalty was rightly upheld and the appeal failed.

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