Manufacturer's Penalty for Alleged Duty Non-Payment Set Aside

The Tribunal set aside the penalty and interest demand imposed on the appellant, a manufacturer of Weighing Machines and Packaging Machines, for alleged non-payment of duty on mixed scrap. The appellant's contention that the non-payment was a bonafide error, not intentional evasion, was accepted. The Tribunal found that the non-payment resulted from an unintentional lapse rather than intentional suppression of facts. As a result, the appeal was allowed in favor of the appellant.

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Issues involved: Alleged non-payment of duty on mixed scrap, imposition of penalty under Section 11AC of the Central Excise Act.

Summary:
- The appellant, a manufacturer of Weighing Machines and Packaging Machines, was alleged to have removed mixed scrap without payment of duty.
- A show cause notice (SCN) was issued claiming duty payable on the removal of waste and scrap, alleging an excess payment by the appellant.
- The appellant contended that the non-payment of duty on mixed scrap was a bonafide error and not intentional evasion, challenging the penalty imposed.
- The appellant argued that they were not aware of the duty on the scrap, which included items like wooden scrap not excisable, and the amount involved was insignificant.
- The Tribunal found merit in the appellant's submission, noting that unintentional lapse rather than intentional suppression of facts led to non-payment of duty.
- Consequently, the penalty and demand for interest were set aside, and the appeal was allowed in favor of the appellant.

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