2011 (9) TMI 541

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....evasion of duty is established. (ii) If answer to Question No. (i) is in the affirmative whether the authority reducing the amount of penalty is duty bound to record reasons for such reduction.   2. Briefly, the facts obtaining in the case are as follows: On 22.01.2001 the revenue received intelligence that the respondent was engaged in manufacture and clearance of "Raj Ratan Qiwam" falling under chapter heading No. 2404.40 of the schedule to the Central Excise Tarrif Act, 1985 without requisite registration. Consequently, on visiting the factory of the respondent, such, clandestinely manufactured goods were found, and consequently seized. 3. A notice dated 23.03.2001 was issued calling upon the noticees, which included the responden....

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....ue in view of the decision of this court taken in the Commissioner of Central Excise vs Kandhari Radio Corporation passed in CEAC No. 6/2007 on 26.09.2011. Mr Satish Kumar submitted that in view of the fact that the Tribunal had confirmed the demand of duty under the provisions of Section 11AC of the Central Excise Act, 1944 there was no discretion available, in directing, as had been done by the Tribunal that, penalty be not levied. 7. On the other hand Mr Bashist appearing on behalf of the respondent submitted that since the respondent had accepted the imposition of duty and voluntarily deposited the duty demanded, no penalty ought to be levied as there was no intention to clear the goods clandestinely, and that clearance of the goods in....

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.... Spinning & Weaving Mills (2009) 13 SCC 448 has held that payment of duty whether made, before or after the issuance of show cause notice is not an aspect which ought to be factored in by an authority seeking to impose penalty under Section 11AC. The court has also gone on to explain its own judgment in the case of UOI vs Dharmendra Textile Processors 2008 (231) E.L.T. 3(SC) by holding that once it is noticed that the conditions provided in Section 11AC are fulfilled, no discretion is left in the authority concerned to reduce the duty to an amount less than the duty determined. The relevant observations on the aforesaid aspects are extracted hereinbelow:- ".....5. In our view the reason assigned by the Tribunal to strike down th levy of pe....