Penalty under Section 11AC requires suppression or intent to evade; disclosed clearances and bona fide interpretation defeat it.

Personal penalty under Section 11AC was unwarranted where the demand arose from scrutiny of RT-12 returns and the assessee had disclosed the clearances and availed Rule 57AD before the Revenue. On those facts, there was no material of suppression, deliberate short payment, or mala fide intent to evade duty. The dispute turned on interpretation of law rather than concealed transactions. As the statutory precondition for penalty was not established, the penalty was deleted.

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Issues: Whether personal penalty under Section 11AC was sustainable when the demand arose from scrutiny of RT-12 returns and the assessee had disclosed the clearances and availed the benefit of Rule 57AD.

Analysis: The demand was based on the returns filed by the assessee, and the clearances and availment of Rule 57AD were disclosed to the Revenue. On these facts, there was no material to show suppression of facts or any mala fide intention to evade duty. The dispute was one of interpretation of law, and the underlying duty demand had already been sustained by the appellate authority, against which no further challenge was shown. In the absence of evidence of deliberate short payment with intent to evade, the statutory basis for penalty was not made out.

Conclusion: The penalty under Section 11AC was not justified and its deletion was .

Ratio Decidendi: Penalty under Section 11AC requires evidence of suppression or intent to evade duty, and it is not attracted where the dispute arises from disclosed transactions and a bona fide misinterpretation of law.

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