TMI Blog2010 (10) TMI 987X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER The Revenue challenges the setting aside of the penalties both under Section 11AC of the Central Excise Act, 1944 and under Rule 173Q of the Central Excise Rules (now replaced by Rule 25 of the Central Excise Rules, 2000). 2. We have heard both sides. The assessees who are manufacturers of articles of plastics and parts of pumps, paid duty by including only value of materials they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fide belief that they were not required to include the value of materials supplied free in the assessable value of their goods which they returned to their customers. Revenue has not put forth any convincing argument to dislodge this finding regarding non-imposition of penalty under Section 11AC. We, accordingly, uphold the finding that penalty under Section 11AC is not sustainable. However, as r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s distinguishable on facts as seen from paras 6 and 7 of the Apex Court s decision. We, therefore, agree with the learned SDR that penalty under Rule 173Q is imposable on the respondents. We, therefore, partly allow the appeal by upholding the penalty under Rule 173Q of the Central Excise Rules while upholding the setting aside of penalty under Section 11AC. (Dictated and pronounced in open cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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