2005 (7) TMI 139

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....ferred certain capital goods as such to the 'S' unit in February 2003. This transfer was not accompanied by payment of duty in any manner. Sub-rule (3) of Rule 3 of the Cenvat Credit Rules, 2002 enabled the assessee to utilize Cenvat credit for payment of duty on capital goods so transferred. This facility, however, was not made use of by the assessee at the time of clearance of the machinery. Officers of Central Excise who visited the 'G' unit on 5-3-2003 detected this omission. The next day, the party paid duty on the above capital goods and also paid interest for the period of delay. Later on, the department issued show cause notice, dated 3-12-2003, for imposing penalty on the assessee under Section 11AC of the Central Excise Act. This ....

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....-3-2003 only. For these delays, interest was paid by the assessee. A penalty to the extent of Rs. one lakh has been imposed on the assessee under Section 11AC. 4. Ld. Counsel for the assessee submits that as the duty was paid prior to issue of show cause notice, no penalty is liable to be imposed under Section 11AC. In this connection, he relies on the following decisions of the Tribunal : (1)     BPL Sanyo Utilities & Appliances Ltd. - 2002 (140) E.L.T. 249 (Tri. - Bang.) (2)     EID Parry (I) Ltd. - 2003 (156) E.L.T. 753 (Tri. - Chennai) (3)     CCE, Delhi-III v. Machino Montell (I) Ltd. - 2004 (168) E.L.T. 466 (Tri.- LB) = 2004 (114) ECR 894 (Tri.-LB) (4)   &....