Suppression of Material Facts not established where the department already knew the arrangement; penalties waived.

Penalties under central excise were held unsustainable because the installation activity was disclosed on the record and the department was already aware of the supply arrangement. The tribunal found no suppression of material facts capable of supporting penal action, since the installation obligation flowed from the goods supplied to the Railways. The duty demand was nevertheless confirmed, and the penalties were waived, resulting in a partly allowed appeal.

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Issues: Whether penalties were sustainable where the installation activity was disclosed by the facts on record and the department was already aware of the arrangement arising from the supply of goods.

Analysis: The appellant had paid central excise duty on the manufactured goods supplied to the Railways. The installation obligation flowed from that supply, and the record did not support a finding that any material fact had been suppressed from the department.

Conclusion: The penalties were not maintainable and were waived. The duty demand was confirmed, and the appeal was partly allowed.

Ratio Decidendi: Where the department is already aware of the relevant facts, suppression of material facts cannot be alleged for the purpose of imposing penalties.

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