Section 11AC penalty cannot stand where short levy appears in statutory records and intent to evade duty is absent.

Personal penalty under Section 11AC of the Central Excise Act was held unsustainable where the short levy on racking losses was already reflected in the assessee's statutory records and RT-12 returns, and the relevant figures were available to the Revenue. The provision applies only when non-levy or short levy results from fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. Payment of the duty amount after the discrepancy was pointed out further indicated absence of mala fide intent, so the penalty was set aside.

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Issues: Whether personal penalty was imposable under Section 11AC of the Central Excise Act, 1944 for the duty demand relating to racking losses.

Analysis: Penalty under Section 11AC is attracted only where non-levy or short-levy occurs because of fraud, collusion, wilful mis-statement, suppression of facts, or contravention of the Act or rules with intent to evade duty. The duty difference was worked out from the assessee's own statutory records and RT-12 returns, and the figures were already available to the Revenue. The assessee also paid the duty amount after the short payment was pointed out, which supported the absence of mala fide intent.

Conclusion: Personal penalty was not justified and was set aside in favour of the assessee.

Ratio Decidendi: Penalty under Section 11AC cannot be sustained when the short levy is reflected in the assessee's own statutory records and there is no fraud, suppression, or intent to evade duty.

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