Section 11AC penalty requires proven suppression of facts with intent to evade duty; penalty set aside.

Penalty under Section 11AC of the Central Excise Act was held not imposable because the record did not establish suppression of facts with intent to evade duty. The goods had been valued on the basis of the pre-amended provision for the relevant period, while the packaging provision had already been amended, and the respondent subsequently paid the duty. The Commissioner (Appeals) had recorded cogent findings, and the Revenue failed to show any contrary material warranting interference. The order setting aside the penalty was therefore upheld in favour of the assessee.

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Issues: Whether penalty under Section 11AC of the Central Excise Act, 1944 was sustainable in the absence of suppression of facts with intent to evade duty.

Analysis: The goods were valued by the respondent on the basis of pre-amended provisions for the relevant period, while the applicable packaging provision had already been amended. The respondent later paid the duty, and the record did not establish any suppression of facts or intention to evade duty. The Commissioner (Appeals) had recorded cogent findings, and nothing contrary was shown by the Revenue to justify interference.

Conclusion: Penalty under Section 11AC was not imposable and the order setting it aside was upheld in favour of the assessee.

Ratio Decidendi: Penalty under Section 11AC can be sustained only where suppression of facts with intent to evade duty is established on the record.

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