Appellant faces 100% penalty for erroneous refund claim under Central Excise Act

The appellant was held liable for a 100% penalty under Section 11AC of the Central Excise Act, 1944 for an erroneous refund claimed. Despite the appellant's arguments and lack of malafide intent, the Tribunal found no evidence to support the appellant's claims that goods reached Jammu or manufacturing occurred there. As the penalty was not paid as directed, the Tribunal upheld the imposition of the 100% penalty, dismissing the appeal.

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Issues:
Penalty under Section 11AC of the Central Excise Act, 1944 imposed on the appellant for erroneous refund claimed.

Analysis:
The appellant, located in Jammu & Kashmir, availed exemption under Notification No. 56/2002-CE and claimed self-credit on duty paid through PLA. Goods were imported, sent to Gujarat, then to Chennai for processing and export, with duty paid in Jammu. Investigation revealed no goods reached Jammu, no manufacturing occurred there. Show cause notice demanded duty, interest, and penalty under Section 11AC. Appellant paid erroneous refund and interest before adjudication. Adjudicating authority allowed 30 days to pay reduced penalty of 25% or face 100% penalty. Appellant contested penalty imposition.

The appellant argued no malafide intent for erroneous refund, claiming goods reached Jammu and were sold there, but lacked transportation papers. Tribunal noted absence of evidence showing goods reached Jammu or manufacturing occurred there. Onus was on the appellant to prove goods' arrival and manufacturing in Jammu, which they failed to do. As penalty was not paid as directed, appellant was held liable for 100% penalty under Section 11AC. Tribunal upheld the penalty imposition, finding no error in the impugned order.

In conclusion, the appeal was dismissed, affirming the imposition of a 100% penalty under Section 11AC of the Central Excise Act, 1944 on the appellant for the erroneous refund claimed.

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