In a Recent Decision reported in 2007 -TMI - 1645 - HIGH COURT, BOMBAY - (Central Excise)  has held that the department does not have power to waive mandatory penalty leviable u/s 11C if the circumstances (i.e. evasion of duty by use of fraud, collusion etc.)  mentioned therein are satisfied.

However, if the circumstances mentioned in section 11C are not existing, and where amount of duty is deposited before issue of show cause notice, no penalty would be levied.

On the other hand, interest mentioned u/s 11B is mandatory and can not be waived.

 

 

Mandatory penalty under section 11C cannot be waived when evasion by fraud is established; interest under section 11B is non waivable. Penalty under section 11C is mandatory when its statutory conditions (such as evasion by fraud or collusion) are met and cannot be waived by the department; if those conditions are absent and duty is deposited before a show cause notice, no penalty will be levied. Interest under section 11B is mandatory and not subject to waiver.