Mandatory excise penalty follows when suppression and intent to evade duty are established under the statutory scheme.

Penalty under the Central Excise penal framework was found to be mandatory once suppression of facts, contravention, and intent to evade duty were established. The notice and adjudication record showed clearance of modvatable inputs as warranty replacements without reversing credit or following the prescribed procedure, satisfying the statutory conditions for invocation of Rule 57(I)(4) read with Section 11AC. Accordingly, the contention that penalty could not be imposed for the relevant post-23.07.1996 period was rejected, and penalty was held imposable for 23.07.1996 to 28.09.1996.

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Issues: Whether penalty was imposable under Rule 57(I)(4) of the Central Excise Rules, 1944 read with Section 11AC of the Central Excise Act, 1944 for the period 23.07.1996 to 28.09.1996.

Analysis: The show cause notice and adjudication order recorded contraventions, suppression of facts and clearance of modvatable inputs as warranty replacements without reversing credit or following the prescribed procedure. The Court held that the conditions for invoking the penal provisions were established. Relying on the principle that once the statutory conditions for penalty under Section 11AC are satisfied, the authority has no discretion in imposing the penalty, it rejected the contention that penalty was unavailable for the post-23.07.1996 period.

Conclusion: Penalty was held to be imposable for the period 23.07.1996 to 28.09.1996, and the Revenue's appeal was allowed to that extent.

Ratio Decidendi: Where suppression of facts and contravention with intent to evade duty are established, penalty under Section 11AC read with the corresponding penal rule follows mandatorily for the relevant period.

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