2007 (5) TMI 38

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....n of the issue of penalty. The direction of the Hon'ble High Court may be noted "This view has been disapproved by this Court in CEA No. 13 of 2005, Commissioner of Central Excise, Delhi-III v. M/s. Machino Montell (I) Limited and another, decided on 25-7-2006 and it has been held that mere deposit prior to issuance of show cause notice will not necessarily negate the situation mentioned in Sec....

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....ent to evade payment of duty as laid down under Section 11AC of the Act." - 3. The learned Counsel for the appellant would point out that the demand has arisen on account of purported shortage of inputs at the time of verification of stock by Central Excise officers. The appellant's explanation was that the input found short had been issued for processing and was available on the shop floor. Th....

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....ere right in holding the same to be the result of clandestine removal and clandestine removal is a case of fraud attracting provisions of Section 11AC. 5. Evidence and findings are entirely in favour of the assessee. There is no material supporting a view that the purported short found quantity had been removed out of the factory. The appellant had also a reasonable explanation that the inputs ....