TaxTMI 
TaxTMI 
2013 (10) TMI 1317
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....cating Authority is whether the CESTAT, Chennai was correct in passing its final order Nos. 1101/2009, dated 1-9-2009 and 1120/2009, dated 3-9-2009 in favour of the first respondent herein in setting aside the mandatory penalty under Section 11AC of Central Excise Act, 1944 or refusing to restore the mandatory penalty amount to Rs. 2,82,566/- as determined by the lower adjudicating authority. 2. It is seen from the acts narrated herein that the assessee had supplied the goods to its own unit at another location without including the overhead cost in the value of the goods sent to the other unit. During the period 2003-2006, the assessee cleared SAC Zinc Anoda ZTL 700 to Western India Shipyard Ltd., Marmugoa without payment of duty o....
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..../undertaking with the department for the receipt and accounting of the goods and to pay the appropriate duty involved on the goods received by them in the event of non-accounting of the goods to the satisfaction of the Deputy/Assistant Commissioner of Central Excise. The duty liability in respect of goods removed was only shifted to the consignee and hence, no reversal need be made on the clearance of the goods in terms of Rule 6 of the Cenvat Credit Rules. Thus, the supply to the Western India Shipyard ltd., could not be, in any manner, treated as in violation of the Rules. 6. As regards the removal of goods to the sister concern without including overhead cost, the assessee stated that the same need not be included as per the prin....
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....on-reversal of 8%/10% and non-adherence to CAS-4 was not due to any oversight and the Officer rejected the claim of the assessee on limitation. As regards the levy of penalty, the Commissioner of Central Excise (Appeals) upheld the levy. However, he viewed that the levy was on the higher side. As the assessee had already paid the entire duty before issuance of show cause notice, the Commissioner viewed that the assessee stood on a better footing than a person, who paid the duty within a period of thirty days of the communication of the order. In the circumstances, he reduced the penalty to Rs. 70,000/- As against this, the assessee as well as the Revenue went on appeal before the Tribunal. 9. The Tribunal specifically pointed out th....
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....would attract penalty, the Authority concerned would have no discretion in quantifying the amount and penalty must be imposed equal to the duty determined under sub-section (2) of Section 11A. 11. The decision reported in (2009) 13 SCC 448 = 2009 (238) E.L.T. 3 - Union of India v. Rajasthan Spinning and Weaving Mills also further pointed out that the mere fact that the assessee had paid the duty before issuance of notice, per se, would not stand in the way of the Revenue invoking the penal provision. Thus, the criteria for imposition of penalty under Section 11AC is a satisfaction that the Officer has to record on the willfulness of the conduct of the assessee with intention to evade payment of tax. 12. In the subsequent dec....
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.... Taking into account that the assessee had not disputed the duty and interest liability, the Tribunal simply cancelled the levy of penalty. Even though the Tribunal had not in principle adverted to the twin conditions laid down under Section 11AC, we do not think that we need to remand the matter once again for the simple reason that the show cause notice issued on 9-5-2006 makes no reference as to the satisfaction of the Adjudicating Authority as to the twin conditions being satisfied before imposing penalty under Section 11AC. Except for pointing out to the violation committed by the assessee resulting in the demand of duty and interest, as far as the levy of penalty is concerned, the show cause notice had called upon the assessee to repl....