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Issues: (i) Whether the demand of duty and penalty arising from alleged clandestine removal of unbranded biris was liable to be interfered with. (ii) Whether the assessee was entitled to the option of paying 25% of the duty amount towards penalty under Section 11AC.
Issue (i): Whether the demand of duty and penalty arising from alleged clandestine removal of unbranded biris was liable to be interfered with.
Analysis: The goods were found in excess of statutory records and private records indicated clearance of biris without payment of duty. The material facts regarding clandestine removal were not seriously disputed, and the exemption claim did not displace the finding based on the seized records and stock verification.
Conclusion: The demand of duty and the related penalty were upheld and no interference was warranted.
Issue (ii): Whether the assessee was entitled to the option of paying 25% of the duty amount towards penalty under Section 11AC.
Analysis: The assessee claimed that the duty had already been deposited and sought the benefit of reduced penalty under the scheme applicable to Section 11AC. The order accepted this limited request and made the reduced penalty conditional upon payment within the stipulated period.
Conclusion: The assessee was held entitled to pay penalty at 25% of the duty amount if the amount was deposited within one month from receipt of the order.
Final Conclusion: The appeal failed on the merits of clandestine removal, but the assessee was granted the limited benefit of reduced penalty under Section 11AC subject to timely compliance.
Ratio Decidendi: Once clandestine removal is established from excess stock and private records, the duty demand and penalty are sustainable, though the statutory benefit of reduced penalty under Section 11AC may still be granted on compliance with the prescribed condition.
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