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2010 (3) TMI 985 - AT - Central ExciseInterest u/s 11AA of CEA - Penalty - valuation - operational cost u/r 8 of the Valuation Rules - includibility - Held that: - Sub-section (2) of section 11AA says that sub-section (1) is not applicable where the duty became payable on or after the date on which the Finance Act, 2001 received Presidential assent. It was on 11-5-2001 that the Finance Act, 2001 came into force. In this scenario, there can be no levy of interest under sub-section (1) of Section 11AA on the amount of duty paid by the assessee for the period upto 10th of May, 2001 - the appellant is liable to pay interest under Section 11AB of the Act on that part of the amount of duty which pertains to the period from 11-5-01 to 30-6-01 and such interest shall be paid for the period from the due date to the date of payment (20-4-02). Penalty - Held that: - there was admittedly undervaluation of the goods, whether deliberate or not - The undervaluation, per se, amounted to breach of Rule 173F of the CER, 1944 and the same would attract the penal provisions of Rule 173Q. Therefore, penalty u/r 173Q in this case is irresistible - however, a penalty of Rs. One lakh does not appear to be reasonable, We reduce the penalty to ₹ 10,000/-. For the limited purpose of requantification of the amount of interest, we send this case back to the original authority - appeal allowed by way of remand.
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