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2013 (11) TMI 985 - AT - Central ExcisePenalty u/s 11AC of Central Excise Act - Shortage of finished product vis-a-vis balance recorded in the RG-1 register – Held that:- Just because any goods whose production has been recorded in the RG-1 register and subsequently those goods were not found in the factory and there is no satisfactory explanation for such shortage, it has to be concluded that the goods found short and whose shortage has not been explained satisfactorily, have been cleared clandestinely without payment of duty - just because the production of those goods had been entered in the RG-1 register, it cannot be the defence of the appellant that there was no intention on his part to evade the duty - Similarly, the appellant having sufficient balance in the RG-23A register, cannot be the ground for concluding that there was no intention to evade the payment of duty. The penalty under Section 11AC of the Act has rightly been imposed - no cognizance of the earlier finding that this is not a case of clandestine removal, can be taken, and this has to be treated as a case of careless drafting the order - Provisions of Section 11AC are attracted and hence the penalty under this Section has been correctly imposed. The appellants pleaded that since in the case the entire duty demand on goods found short had been paid before the issue of show cause notice and no option to pay reduced penalty under proviso to Section 11AC has been given – Relying upon K.P. Pouches (P) Ltd. vs. Union of India [2008 (1) TMI 296 - HIGH COURT OF DELHI] - the appellant company cannot be denied the benefit of reduced penalty - the plea of learned Counsel of the appellant regarding applicability of proviso to Section 11AC is correct and, as such, the benefit of the proviso cannot be denied - Accordingly, the penalty under Section 11AC is reduced to 25% of the duty demand – Decided partly in favour of Assessee.
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