Section 11AC penalty inapplicable where the dispute arose from stock-taking loss, with remand for other penalty provisions sustained.

Section 11AC of the Central Excise Act was held inapplicable because the dispute arose from stock-taking loss, not from non-levy or short-levy of duty. Since the statutory precondition for invoking that penalty provision was not satisfied on the facts, penalty under Section 11AC could not be sustained. The remand by the lower appellate authority for examination of penalty under other applicable provisions was upheld as proper.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 was applicable where the case arose from stock-taking loss and not from non-levy or short-levy of duty.

Analysis: The case was treated as one of stock-taking loss. On that footing, the statutory condition for invoking Section 11AC, which applies to cases of non-levy or short-levy, was held not to be attracted. The lower appellate authority had, however, remanded the matter for consideration of penalty under other provisions, and that course was found to be proper.

Conclusion: Section 11AC was held to be inapplicable to the facts of the case, and the remand for consideration of penalty under other provisions was sustained.

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