2008 (8) TMI 270

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....s limited to non-imposition of penalty. It may be mentioned here itself that penalty was not imposed on the premise that the respondent-assessee had paid the entire duty prior to issuance of the show cause notice. While affirming the order of the Assistant Commissioner the learned Commissioner placed reliance on the Larger Bench decision of the Tribunal in Machino Montel (I) Ltd. - 2004 (168) E.L.T. 466 (Tri.-LB). He noticed that the decision of the Tribunal in the case of Rashtriya Ispat Nigam Limited v. CCE - 2003 (161) E.L.T. 285 (T) on the issue of imposition of penalty where entire duty stands paid prior to issuance of show cause notice, was upheld by the Supreme Court by summarily dismissing the appeal of the Department vide 2004 (163....

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.... can be filed only on the direction of Committee of Commissioners of Central Excise upon review of the impugned order but no such direction has been brought on record. On merit Counsel submitted that the provision of Section 11AC can be applied only in cases of non payment or short payment duty by reason of fraud, collusion, wilful mis-statement or suppression of facts or contravention of any of the provisions with intent to evade payment of duty. In the instant case, there was no such allegation in the show cause notice as to any contravention with intent to evade payment of duty. The basic condition not being satisfied the authorities rightly declined to impose a penalty particularly when the respondent already paid entire duty before iss....

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.... root of the matter as the same can be cured post facto by issuance of an authorization at later stage, and therefore, I am inclined to think that the provisions of Section 35B(2) stood substantiated complied with and therefore the appeal cannot be dismissed summarily as not maintainable. 7. Coming to the merit of the case, it appears that there has been divergence of view on the question as to whether penalty should be imposed where duty was paid before issuance of the show cause notice. However, in the facts of the case, it is not necessary to consider the larger question. Penalty can be imposed within the framework of Section 11AC of the Act. Rule 25 of the Central Excise Rules which deals with penalty also can be applied subject to pro....