Penalty under Section 11AC requires proved suppression with intent to evade; absence of such material barred equal penalty.

Penalty equal to duty under Rule 13 of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act was not sustainable because there was no material to show suppression of facts or intent to evade duty. The assessee had reversed the credit after delay on the basis of transaction value, and the Court accepted the Tribunal's finding that deliberate evasion was not established. As the statutory precondition for equal penalty was absent, Section 11AC could not be invoked. The Tribunal's deletion of penalty was therefore upheld.

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Issues: Whether penalty equal to duty was leviable under Rule 13 of the Cenvat Credit Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 in the absence of material showing suppression of facts with intent to evade duty.

Analysis: Rule 3(4) of the Cenvat Credit Rules, 2002 came into force on 01.03.2003. The assessee reversed credit after some delay on the basis of transaction value, and the Court accepted the Tribunal's finding that there was no material to establish deliberate suppression or an intention to evade duty. In the absence of such a finding, the precondition for imposing equal penalty under Section 11AC was not satisfied.

Conclusion: Penalty under Section 11AC was not leviable, and the deletion of penalty by the Tribunal was upheld.

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