Tribunal upholds goods demand, confiscation; penalty set aside under Central Excise Act.

The Tribunal upheld the confirmed demand for finished goods found short and the confiscation of excess goods. However, the imposition of penalty under Section 11AC of the Central Excise Act was set aside based on precedent where it was held that the penalty is not sustainable if duty has been paid before the show cause notice. The appeals were disposed of accordingly, with the Tribunal affirming the impugned order except for the penalty imposition.

---

---

Issues involved: Appeal against confirmed demand for finished goods found short, confiscation of excess goods, imposition of penalty u/s 11AC of Central Excise Act.

Summary:

Issue 1: Demand confirmation and confiscation of goods
The appellants appealed against the order confirming demand for finished goods found short and confiscating excess goods. They argued that there was no evidence of goods being cleared without payment of duty due to discrepancies in stock taking. The appellants contended that the excess goods found were not intended for clearance without payment.

Issue 2: Imposition of penalty u/s 11AC
The main contention was whether penalty u/s 11AC of the Act was sustainable when duty had been paid before the issuance of the show cause notice. The appellants cited a decision by the Hon'ble Rajasthan High Court in a similar case where it was held that penalty under Section 11AC is not sustainable if duty has been paid prior to the show cause notice. The Tribunal, following this precedent, set aside the imposition of penalty, upholding the impugned order in all other aspects. The appeals were disposed of accordingly.

---