Appeal dismissed as pre-duty payment not suppression of facts, no intent to evade duty shown.

The Tribunal dismissed the Revenue's appeal challenging the waiver of penalty, emphasizing that the duty payment before the show-cause notice did not constitute suppression of facts warranting penalty imposition under Section 11AC. The Tribunal ruled that there was no evidence of intent to evade duty by the respondent, thus upholding the decision that the penalty under Section 11AC was not applicable.

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Issues: Revenue's challenge to penalty waiver based on duty payment before show-cause notice; Applicability of Section 11AC for penalty imposition.

Issue 1: Revenue's challenge to penalty waiver
The judgment revolves around the appeal filed by the Revenue challenging the waiver of penalty by the Commissioner (Appeals). The Revenue contended that the respondent had paid the duty before the issuance of the show-cause notice, leading to the waiver of penalty. The Revenue argued that the duty payment following the stock taking method of eye-estimation amounted to suppression of facts, justifying the penalty imposition. The Revenue highlighted the decision in the case of CCE, Delhi-III v. Machino Montell (I) Ltd., emphasizing the applicability of Section 11AC for penalty imposition.

Issue 2: Applicability of Section 11AC for penalty imposition
The respondent, represented by the learned Advocate, countered the Revenue's argument by stating that the stock taking, particularly of inputs, was done on eye-estimation during the Preventive party's visit. The respondent emphasized that there was no specific allegation of suppression of facts with intent to evade duty. The respondent argued that the penalty under Section 11AC was not imposable without evidence of wilful misstatement, suppression, collusion, or fraud. The judgment highlighted the absence of any intention to evade duty by the respondent, as investigating authorities failed to ascertain such intent. The Tribunal upheld the impugned order, ruling that the penalty under Section 11AC was not applicable in the absence of evidence showing intent to evade duty.

Final Decision:
After hearing both sides, the Tribunal dismissed the appeal filed by the Revenue and disposed of the cross-objection filed by the respondent. The judgment emphasized that the mere acceptance of duty liability based on eye-estimation did not amount to suppression of facts warranting penalty imposition under Section 11AC. The Tribunal upheld the decision, stating that the investigating authorities did not establish any intention on the respondent's part to evade duty, leading to the conclusion that the penalty under Section 11AC was not imposable.

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