2015 (11) TMI 595

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....Zone-1, wherein Ld. Commissioner has set aside the penalties imposed under Section 11AC. 2. The fact of the case is that during the period from November, 2005 to March, 2006 the appellant defaced fully manufactured goods such motor vehicles part falling under Chapter heading 87089000 of CTA, 1984 valued at Rs. 10,99,408/- within the factory premises as some were damaged during the flood of 26/7/2005. The scrap generated by such defacement was cleared on payment of duty. The department was of view that remission of duty was not granted on the finished goods, duty was payable therefore show cause notices were issued, wherein the demand of Cenvat Credit of Rs. 1,79,423/- and 16,82,222/- respectively proposed. In the order-in-Original, deman....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... hand, Shri. Sachin Chitnis, Ld. Counsel for the respondent submits that Ld. Commissioner(Appeals) dropped penalty on the ground that loss due to flood is beyond the control of the respondent and it was a natural disaster in Mumbai which is well known to the every citizen of country. Loss of the goods in the flood cannot be construed as clandestine removal and no malafide can be alleged on the respondent, therefore Ld. Commissioner(Appeals) considering this undisputed aspect, dropped the penalty which deserves to be maintained. He further submits that the matter of remission of duty is still pending before the Tribunal, therefore in overall fact and circumstances of the case Ld. Commissioner's order must be upheld and he prayed for the dism....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... under Section 11AC of Central Excise Act, 1944, was not warranted. 11. In this case of the finished products were defaced and the resultant scrap was cleared on payment of duty. The original adjudicating authority has failed to establish in his order that there was any intent to evade duty as required in terms of the Hon'ble Supreme Court's decision in the case of Rajasthan Spinning and Weaving Mills Ltd. Vs. CCE Jaipur reported in 2003(152) ELT 232 (SC)]. I, therefore, find no merit in imposition of mandatory penalty especially in the background of damage caused by floods which is not disputed. 12. I, therefore, find merit in the submission of the original adjudicating authority that the imposition of penalty was not war....