2010 (2) TMI 401

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....JCDR, for the Appellant. None, for the Respondent. [Order]. - The respondents are manufacturers of M.S. Bars chargeable to Central Excise Duty under sub-heading 7144 99 90 of the Central Excise Tariff Act, 1985. Their factory was visited by the. Jurisdictional Central Excise Officers on 19-9-05 and physical stock taking was conducted in the presence of independent panch witnesses in course o....

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....is imposed penalty of Rs. 1,34,986/- on the respondent under Section 11AC. The Commissioner (Appeals), however, on appeal by the respondent vide order-in-appeal dated 21-2-08 set aside the order of penalty on the ground that there was no evidence that the goods found short had been clandestinely cleared and also that the entire duty had been paid prior to the issue of show cause notice. It is agai....

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....aid prior to the issue of show cause notice, the penalty under Section 11AC cannot be waived as has been done by the Commissioner (Appeals). According to the learned DR, since the elements for invoking Section 11AC are present in this case, the penalty as per the provisions of this section should have been imposed and in this regard, he cited the judgment of Hon Supreme Court in the case of Union ....

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....r waiving the penalty, mentioned in the impugned order is also not correct as just because in the case of clandestine removal, the duty had been paid prior to the issue of show cause notice, it does not save the assessee from the provisions of Section 11AC. Hon'ble Rajasthan High Court in a recent judgment in the case of Union of India v. Rajasthan Spinning & Weaving Mills (supra) has held that pe....