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2014 (12) TMI 1171 - CESTAT AHMEDABADDemand of duty on the finished goods clandestinely removed - demand of Customs duty on raw material used in the manufacture of the said finished goods. - Held that:- Res Judicata would not apply in the tax matters. Demand of duty on raw materials cannot be sustained when the demand was raised on the final product. This view is supported by the decision of the Tribunal in the case of M/s Sanjari Twisters (2007 (9) TMI 369 - CESTAT, AHMEDABAD) which is upheld by the Hon’ble Supreme Court [2008 (11) TMI 671 - SUPREME COURT] - in so far as the setting aside of entire amount of penalty under Section 11Ac of Central Excise Act 1944. Commissioner (Appeals) accepted that the clandestine removal of the final product involving demand of duty of ₹ 11,00,055.00. On a query from the Bench, ld.A.R. submits that the respondent has not filed any cross objection. Hence, the imposition of penalty under Section 11AC of Central Excise Act 1944 in respect of the demand of duty of ₹ 11,00,055.00 is warranted. The Hon’ble Supreme Court in the case of Union of India Vs Dharmendra Textile Processors [2008 (9) TMI 52 - SUPREME COURT ] held that the demand of duty on extended period of limitation as well as the ingredients available under Section 11A, a mandatory penalty would be imposed. - Decided partly in favour of assessee.
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