2007 (7) TMI 22

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....f law: "Whether authorities under Central Excise Act/Rules can impose penalty either u/s 11AC or Rule 25, even if the assessee has paid non levy/short levy before issuance of show cause notice?" 2. During the course of arguments, we have realised an error that show cause notice dated 5-3-2004 (Exh.A) did not invoke the powers u/s 11AC of the Act, but it invited the assessee as to why penalty....

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....Excise, Visakhapatnam [2006 (161) E.L.T. 285 (Tri.-Bang.)], the Tribunal at Bangalore took a view that when party has already deposited the duty to the department prior to issue of show cause notice, there is no justification to impose penalty u/s 11AC as well as under Rule 173Q. The view recorded by the Tribunal was confirmed by the Supreme Court when the department was in appeal before the Supre....

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....is High Court observed thus: "So far as the first submission advanced by Mr. Desai with regard to interpretation of Rule 25 in the backdrop of Section 11AC of the Act is concerned, bare reading of Section 11AC and Rule 25 side by side would show that Section 11AC does not provide any discretion whereas the Rule 25 provides for discretion. Rule 25 itself contemplates higher and lower limit withi....

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....ever is higher. There is no lower limit. 6. In the matter at hands, Section 11AC was not invoked by the department and penalty imposable under Rule 25 is discretionary. Although Assistant Commissioner, Central Excise & Customs, Aurangabad-II Division was pleased to impose penalty under Rule 25 by observing that there was wilful suppression, Commissioner (Appeals) has reversed this finding of fa....