TaxTMI 
TaxTMI 
2008 (11) TMI 158
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Jt. CDR invited our attention to the Final Order Nos. 855, 856/2005 dated 1-6-2005 [2005 (192) E.L.T. 899 (Tribunal)] in the Respondent's own case, passed by this Bench, particularly to Paragraph 9 which is reproduced herein below:- "9. The appellant who is under SRP has an obligation to pay duty on the correct value. The fact that the price of sandalwood oil has escalated is not in dispute. Definitely, the escalated cost has been taken into account while arriving at the value of Sandalwood Oil in stock transfer to Bangalore unit is a very serious lapse. The inference drawn by the adjudicating authority that there is intention to evade payment of duty cannot be faulted. The fact that the appellants are a Government unit is not releva....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ear that there is no scope for any discretion. In Para 136 of the Union Budget reference has been made to the provision stating that the levy of penalty is a mandatory penalty. In the Notes on Clauses also the similar indication has been given." In view of the above decision and also a clear findings of this Bench in Paragraph 9 of the Final Order extracted supra, the mandatory penalty ought to have been imposed. 3. On the other hand, the learned Advocate invited our attention to the Paragraph 11 of the same Final Order, particularly the portion as extracted below: "We are in agreement with the above contentions of the appellant that Rule 7(1)(b) of Cenvat credit Rules cannot debar availment of CENVAT Credit at Bangalore factory fo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....correct assessable value in respect of Sandalwood oil that was being cleared to their Bangalore Unit. Such removal for captive consumption also amounts to sale. The under valuation of the product in question was detected by the Department when the officers visited the factory for conducting audit. All these facts have not been disputed by the assessee. On the other hand their reply clearly admits that they had committed a mistake by not revising the assessable value from time to time and the differential duty has been paid soon after its detection. In these circumstances, it is necessary to examine whether penalty is imposable under Section 11AC as proposed in the show cause notice dated 30-8-2004? As discussed in my above findings the g....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve acted in time to revise the value of their product consequent to increasing the price of Sandalwood. This is definitely a lapse. The duty is payable by them and they could not have taken a shelter under limitation provisions. That is why this Bench in the Final Order cited supra had confirmed the demand of duty from Mysore unit. However, while taking a decision on the penalty, the details of the circumstances should be taken into consideration. This is what the Commissioner has done in the impugned order. It is also seen that the final product is cleared in terms of Section 4A at the maximum retail price. Therefore there is no duty escapement at all and the Revenue has not suffered any loss in this irregularity. This fact cannot be ignor....