2018 (6) TMI 996

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....use notice?" 2. Brief facts are as under. 3. That the appellant no.1 is a partnership firm. Appellant nos.2 and 3 are the parters of the firm. Appellant no.4 is the authorized signatory of the firm. The appellant is engaged in the manufacturing activity mainly manufacturing man made processed fabrics. Premises of the firm were subjected to search by the Excise Authorities on 28.11.1998, during which, the partner of the firm admitted past clandestine removal of the goods worth Rs. 5.47 lakhs (rounded off) without payment of the duty. The raiding party also found processed fabric valued at Rs. 5.74 lakhs (rounded off) which was not accounted in the record. Further quantities were found which were also not entered in the record. Such goods ....

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....lakh only] on Shri Dhiraj Kumar Manikchand Begani, Karta of the mills, Rs. 5,000/[ Rupees five thousand only] on Shri Gauri Shanker Jainarayan Sharma, Authorised Signatory of the mills and Rs. 1,00,000/[ Rupees one Lakh only] on Shri Ashok Kumar Ghewarchand Begani, Partner of the Mills. " 5. Thus, the Adjudicating Authority while confiscating the seized goods, offered return of the same upon payment of redemption fine of Rs. 2,24,085/. He confirmed excise duty of Rs. 2,07,851/. He imposed penalty of Rs. 2 lakhs on the firm under rule 173Q(1) of the Central Excise Rules. He imposed personal penalty of Rs. 1 lakh each on the two partners and of Rs. 5,000/on the authorized signatory of the firm. 6. This order was challenged by the appellant....

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....herefore could not have been imposed. In this context, he relied on the following judgments: I. In case of Commr. of Cus. & C. Ex. Noida v. Supreme Industries Ltd. reported in 2016 (341) E.L.T. 607 (All.), in which, in the context of section 11AC of Central Excise Act, 1944, it was observed that if the duty is paid by the assessee even before issuance of show cause notice, imposing penalty under section 11AC and interest under section 11AB is issued, this would show that there was no question of any fraud, misrepresentation or suppression of facts and therefore penalty and interest should not be levied. II. For the same purpose, reference is also made to the decision of Karnataka High Court in case of Commissioner of C. Ex., Mangalore v....

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....removes any excisable goods in contravention of any of the provisions of these rules; or, (b) does not account for any excisable goods manufactured, produced or stored by him then all such goods shall be liable to confiscation of the manufacture, producer, registered person of a warehouse or a registered dealer shall be liable to a penalty not exceeding three times the value of the excisable goods in respect of which such contravention have been committed or rupees five thousand whichever is greater. 13. This rule does not contain any specific condition for waiver of the penalty in case the duty is deposited before issuance of show cause notice. Section 11AC of the Act did contain such provision for waiver of penalty in cases not involving....