Suppression of facts and penalty under Central Excise law sustained where records showed recorded clearances and duty deposit.

Suppression of facts with intent to evade duty was found to justify penalty under Section 11AC of the Central Excise Act, 1944. The record showed that goods were cleared under regular challans and invoices and that the transactions were reflected in the assessee's accounts, but the appellate view that misdeclaration was established merely because the goods were sold under a brand name was not accepted. In the overall factual setting, the earlier deposit of duty and interest, together with the recorded dealings, supported the conclusion that the ingredients for penalty were attracted. The penalty was held sustainable and the adjudication order was restored.

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Issues: Whether suppression of facts with intent to evade duty was established so as to justify imposition of penalty under Section 11AC of the Central Excise Act, 1944 and restoration of the adjudication order.

Analysis: The findings recorded in the adjudication order showed that the goods were cleared under regular challans and invoices, the transactions were reflected in the records, and the conduct of the assessee indicated a bona fide mistake rather than deliberate concealment. The appellate authority's view that misdeclaration was established merely because the goods were cleared under the brand name was not accepted. In the overall factual setting, the earlier deposit of duty and interest, the recorded transactions, and the nature of the dealings supported the conclusion that the ingredients for penalty under Section 11AC were attracted.

Conclusion: The issue was decided against the assessee and in favour of the Revenue; the penalty under Section 11AC was held to be sustainable and the adjudication order was restored.

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