Commissioner's Decision Upheld, Penalty Set Aside under Section 11AC, Weight Difference Not Clandestine

The judgment upholds the decision of the Commissioner (Appeals) to set aside the penalty imposed under Section 11AC, as the weight difference in CTD bars was not deemed as clandestine removal. The appeal by the Revenue is dismissed, and the cross objection is disposed of accordingly.

---

---

Issues involved: Appeal against penalty imposed u/s 11AC for duty evasion and weight difference in stock of CTD bars.

The judgment addresses the appeal filed by the Revenue against the penalty imposed under Section 11AC. The Commissioner (Appeals) set aside the penalty of Rs. 1,000 since duty was paid before the show cause notice. The Revenue, still aggrieved, appealed. The respondents, manufacturers of CTD bars, were suspected of evading central excise duty through clandestine clearances. A search revealed a difference in stock of finished goods and raw materials. The assessee accepted the difference and paid duty, attributing it to accumulated weight difference over time. The adjudicating authority imposed a penalty, which the JDR argued against, citing a High Court decision on penalty imposition guidelines for clandestine removal. The JDR contended that the weight difference in CTD bars did not constitute clandestine removal, leading to the dismissal of the Revenue's appeal and disposal of the cross objection.

In conclusion, the judgment upholds the decision of the Commissioner (Appeals) to set aside the penalty imposed under Section 11AC, as the weight difference in CTD bars was not deemed as clandestine removal. The appeal by the Revenue is dismissed, and the cross objection is disposed of accordingly.

---