TaxTMI 
TaxTMI 
2010 (5) TMI 316
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....he Revenue has sought to raise the following substantial Question of Law:- "Whether the penalty under Section 11AC of the Central Excise Act is mandatory and equal to the duty demanded or the authority has discretion to impose lesser penalty". Earlier this appeal had come up for hearing before a Division Bench which vide its order dated 25.1.2007 dismissed the appeal and held that the penalty under Section 11AC of the Central Excise Act,1944 is mandatory where the intention to evade tax is established. However, as the counsel for Revenue had failed to point out any specific intention on part of the assessee to evade tax, therefore, it was held that no penalty was leviable. Against the aforesaid order, the Revenue filed a SLP before the H....
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..../- as the ground that the value on which duty paid was incorrect inasmuch as the duty was paid on the ex-factory price instead of the depot price. iv Rs. 13,407/- on the ground of free samples given to farmers. The Adjudicating Authority confirmed the whole amount of duty and imposed equal amount of penalty under Section 11 AC of the Central Excise Act. While dealing with the demand raised on the count that goods have been cleared without invoices but under OGP, the Adjudicating Authority found that department has brought on record the factual position which shows that in respect of goods cleared on 40% of the OGP, Central Excise Duty was paid but on the remaining goods no duty was paid and no invoice under Rule 52A was issued. The Adjud....
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.... Ld. Adjudicating Authority also only in case of 60% OGP, there is evidence of clearance without payment of duty. There was procedural lapse in respect of 40% OGP. So demand even though confirmed in respect of those gate passes, penalty cannot be imposed. He relied upon judgment of Hon'ble Supreme Court in the case of Union of India vs. Rajasthan Spinning and Weaving Mills, 2009 (238) ELT 3 (S.C). We have considered arguments of both the learned counsels and perused the record. At the outset, we noticed that the present case is not a case of penalty leviable under Rule 96ZO and Rule 96ZQ and in fact the question involved in the present case is "Whether the penalty under Section 11AC of the Central Excise Act, 1944 is mandatory and equal to....