2018 (2) TMI 630 - AT - Central Excise

Tribunal cancels penalty under Section 11AC, citing timely payment before notice. Legal relief granted.

The Tribunal canceled the levy of penalty under Section 11AC, as the appellant had paid the duty amount with interest before the show cause notice was ... Penalty u/s 11AC - duty with interest paid before issuance of SCN - Held that: - the appellant has deposited all duty amount along with interest before issuing the show cause notice. When it is so, than penalty is not leviable under Section 11AC - reliance placed in the case of Union of India v. Rajasthan Spinning and Weaving Mills [2009 (5) TMI 15 - SUPREME COURT OF INDIA] - appeal allowed. Issues: Levy of penalty under Section 11ACThe judgment pertains to an appeal against order-in-appeal No. 87/2008 dated 15/02/2008. The appellant, represented by Ms. Manasi Patil, did not contest the appeal on merits but raised the issue of the levy of penalty under Section 11AC. The appellant argued that the duty demand was fully paid along with interest before the show cause notice was issued.After hearing both parties, the Tribunal noted that the appellant had indeed deposited the entire duty amount along with interest before the show cause notice was issued. Citing various legal precedents such as Union of India v. Rajasthan Spinning and Weaving Mills, Commissioner of Central Excise v. Rashtriya Ispat Nigam Ltd., and others, the Tribunal concluded that penalty under Section 11AC was not applicable in such circumstances.Based on the established legal position, the Tribunal modified the impugned order and canceled the levy of penalty while upholding the remaining aspects of the order. The appellant was granted relief only in terms of the penalty, and the appeal was partly allowed. The decision was dictated and pronounced in the open court by Justice Dr. Satish Chandra, President, and Shri C J Mathew, Member (Technical).