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2015 (3) TMI 81 - AT - Central ExciseNon payment of appropriate excise duty on the scrap generated at the job worker premises from the goods sent and processed under rule 57F (4) of Central Excise Rules, 1944 - Removal of capital goods to their job workers premises without reversal of credit - Imposition of interest and penalty - Held that:- Department initiated detailed investigations on 3.3.1999 and recorded statements and detected non-payment of excise duty on scrap cleared from the job worker premises and also detected clearance of capital goods without reversal of credit during the period 1994-95 to 1998-99. The suppression of facts with deliberate intention to evade payment of duty has been clearly brought out in the findings of the adjudication order. It is evident from the records that the appellants have paid the duty only on 9.3.99 i.e. after the department detected the duty evasion. Since the suppression of facts is established beyond doubt the adjudicating authority has rightly invoked Section 11AC and Section 11AB for imposition of penalty and the interest and rightly restricted the penalty under Section 11AC and interest under Section 11AB only on the demand amount covered for the period from 28.9.1996. As held by the apex court in the case of UOI Vs Dharmendra Textile Processors once mens rea with intention to evade payment of duty is established, appellants are liable for mandatory penalty and interest under Section 11AB. - Following decision of Arun Vyapar Udyog Pvt. Ltd. [2013 (12) TMI 817 - MADRAS HIGH COURT] - demands confirmed by the Lower Authority is liable to be upheld and the appellants are liable for penalty under Section 11AC and liable for interest under Section 11AB and under Rule 57 U (6) and Rule 57U (8) of CER prospectively for the demand amount covered from 28.9.96. Whether the amended provisions of Section 11AC of the Act for availing 25% penalty is applicable to the present case. - Held that:- There is no evidence to show that payment of Section 11AB interest as well as interest demanded under Rule 57U(8) of CER and reduced penalty paid before 30 days of receipt of adjudication order. Therefore, the adjudicating authority in the impugned order confirming the demand and imposing penalty under Section 11AC and demanding interest under Section 11AB and also under rule 57U of CER equivalent to the duty payable after 28.9.96 is sustainable. Appellants are not eligible for the reduced penalty of 25% of the duty amount. - Following decision of CCE Raigad Vs Castrol India Ltd. [2012 (6) TMI 697 - BOMBAY HIGH COURT]. Impugned order imposing penalty under Section 11AC and demanding interest under Section 11AB equivalent to duty payable after 28.9.1996 and imposition of penalty under Rule 57U (6) and interest under Rule 57U (8) of CER is upheld. - However, penalty of ₹ 1,00,000/- imposed under Rule 173Q is set aside. - Decided partly in favour of assessee.
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