TMI Blog2007 (8) TMI 184X X X X Extracts X X X X X X X X Extracts X X X X ..... lhi (for brevity, 'the Tribunal). It has been claimed that the following questions of law would arise for determination of this Court :- "(i) Whether equal penalty under Section 11AC is liable to be imposed on the assessee in those cases which fall under the purview of Explanation (1) to sub-section (2B) of Section 11A of the Central Excise Act, 1944, where duty has been deposited before issue of show cause notice? (ii) Whether the CESTAT is justified in waiving the penalty imposed on the Director of the party under Rule 26 of the Central Excise Rules particularly when he had admitted the shortage of the goods detected by the Central Excise Staff and the clandestine removal of the goods could not be carried out without his knowledge and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re issuance of show cause notice (P-2). The appellant-revenue challenged the order on further appeal to the Tribunal. The appeal was dismissed vide order dated 1-6-2006 by adopting the rationale that once the amount of duty has been paid before the issuance of show cause notice then no penalty was leviable. The Tribunal in that regard placed reliance w its Larger Bench decision in the case of Machino Montell, 2004 (168) E.L.T. 466 (Tribunal) = 2004 (62) RLT 709 (P-3). 4. Mr. Rahul Sharma, learned counsel for the appellant-revenue has submitted that the order passed by the Tribunal is primarily based on an earlier order passed by a Larger Bench of the Tribunal in Machino Montell case (supra) and that the aforementioned view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t payable thereon under section 11AB is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this section shall be twenty-five per cent of the duty so determined : Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso : Provided also that where the duty determined to be payable is reduced or increased by the Commissioner (Appeals), the Appellate Tribunal or, as the case may be, the court, then, for the purposes of this section, the duty, as reduced or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yment of duty. In other words, the element of mens rea has to be present. It would, thus, be necessary that the authorities under the Act must record a finding that non-levy of duty or short levy of duty etc. was actuated by the intention to evade payment' of duty. When the order dated 13-8-2005, passed by the Adjudicating Authority (P-I), order dated 13-2-2006, passed by the Appellate Authority (P-2) and order dated 1-6-2006, passed by the Tribunal (P-3), are examined in the light of Section 11AC of the Act, no finding has been recorded regarding mens rea or any .intention on the part of the assessee that the goods were removed with the intention to evade payment of duty. The Adjudicating Authority merely makes a reference to the state ..... X X X X Extracts X X X X X X X X Extracts X X X X
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