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2009 (8) TMI 1057 - HC - Central ExciseWhether mandatory penalty under Section 11AC can be imposed on the assessee and interest under Section 11AB can be levied in the case where duty has been paid after detection of the shortage by the department but before issuance of show cause notice in view of the facts and circumstances mentioned above? Held that:- The demand was based merely on the shortage detected during physical tallying. The dealer had not taken any account of the excess use of inputs for which no credit was claimed. Accordingly, the Tribunal found that once the excesses were not clandestine receipt of input, then the same view was required to be taken with regard to shortage also, namely that the shortages are not a result of any clandestine or unauthorized utilization. The shortage has been found to be very small namely 0.24 per cent. which is fraction of the input receipt. The shortages have been found within the tolerable limits expected by an efficient management. It was, therefore, rightly held that no demand could be raised under Rule 57-I of the Rules. Accordingly, Section 11AC and Section 11AB of the Act would have no application to the facts of the present case. Appeal dismissed.
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