2009 (1) TMI 164

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....tice. Therefore the penalty u/s 11AC may be reduced to 25%. On the other hand ld. DR submits that it is not only the shortage found but there is a clear admission by the receiver of the goods that he has received the same without payment of duty. He also submits that in view of the Hon'ble Supreme Court decision in the case of M/s. Dharmendra Textile Processors [2008 (231) E.L.T. (S.C.) = 2008 (89) RLT 103 (SC-LB)], penalty under Section 11AC is mandatory unless the duty, interest and penalty have been paid before the issue of adjudication order or within a month of the adjudication order. 3. I have considered rival submissions. No doubt the Hon'ble Supreme Court has held that penalty u/s 11AC is mandatory unless the duty, interest and p....

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....o that they know the exact situation as far as mandatory penalty is concerned. They cannot also be found fault with if they hope that the penalty could be 25% wherever duties have been paid before issue of show cause notice or it can be 'nil' rather than being 100%. Therefore, it is quite possible that the appellants had a bona fide belief that penalty would be 25% under Section 11AC if duty was paid before issuance of show cause notice and therefore would not have made the payment immediately after the adjudication order. Further Section 11AC creates a right of payment of penalty at a reduced rate i.e. if the payment is made within a month of the adjudication order. Section 35F creates a right of hearing the appeal by waiving the requireme....