TaxTMI 
TaxTMI 
2010 (6) TMI 413
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....ry premises were visited by the jurisdictional central excise officers on 28-12-2005 when the stock of finished goods was checked in the presence of two panch witnesses. On checking the stock of finished goods, namely stamping lamination, shortage of 7271.30 kg involving central excise duty of Rs. 2,07,666/- was found. Enquiry was made with the Managing Director of the appellants, who accepted the shortage but stated that the shortage may be due to accumulated shortage/differences as they have never conducted physical stock taking. However, they paid the entire amount of duty on 2-1-06 earlier. Thereafter a SCN was issued to the appellants for confirming duty demand on quantity of 7271.30 kg of stamping lamination found short and also for i....
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....pellants still had paid the entire duty even prior to the issuance of SCN, that there is no clandestine removal as merely on the basis of shortage it cannot be alleged that the goods found short had been removed clandestinely, that clandestine removal has not been admitted by the managing director of the appellant company and that in any case, if it is held that the shortage was due to clandestine removal, the first proviso to Section 11AC would become applicable since the entire duty had been paid prior to issue of SCN, but still the Assistant Commissioner in accordance with first proviso to Section 11AC did not give an option to the appellants to pay reduced penalty within stipulated period and in view of this, in accordance with judgment....
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....that he also relies upon the judgment of the Hon'ble Supreme Court in the case of Union of India v. Rajasthan Spinning & Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.) wherein it was held that once the provisions of Section 11AC are attracted, the penalty has to be imposed, that under Section 11AC, there is no scope to reduce the penalty and in this regard he relies upon the judgment of the Hon'ble Supreme Court in the case of Union of India v. Dharamendra Textile Processors reported in 2008 (231) E.L.T. 3 (S.C.) and in view of this notwithstanding the first proviso to Section 11AC and judgement of the of Hon'ble Delhi High Court in the case of K.P. Pouches (P) Ltd. v. UOI (supra), there is no discretion available to the appellate adj....
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....ction 11A(1) and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order, the amount of penalty payable by such person under this section shall be 25% of the duty so determined provided penalty equal to 25% of duty is also paid within 30 days referred to in the proviso. Thus, when on account of clandestine removal or evasion of duty by wilful mis-statement or suppression of facts on the part of an assessee, the duty demand is confirmed under sub-section (2) of Section 11A(1) against an assessee and he pays the entire duty alongwith interest and penalty equal to 25% of duty within the period of thirty days from the date of communication of the order, his penalty liability would ....