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2015 (11) TMI 1340 - AT - Central ExciseImposition of penalty u/s 11AC - differential duty was paid suo motu as pointed out by the Audit Team without disputing liability - Clearance of goods to sister concern much prior to issue of show-cause notice - Clearance of goods in unpacked condition - malafide intention - Section 11A(2B) - Held that:- Goods were cleared by the appellant which was input for the consignee sister concern therefore the valuation was governed by Rule 8 of Central Excise Valuation Rules, 2000 which provides the valuation i.e. 110% of cost of manufacturing. The goods were cleared in July, 2007 and the appellant has calculated the cost of manufacturing on the basis of data for the financial year, 2006-2007 which is the correct procedure. However the appellant was supposed pay the differential duty if it arise due to enhancement of the cost on actual basis which cannot be worked out before completion of the financial year 2007-2008. In such procedure the appellant can pay the differential duty only some- where-in September - October, 2009 when the Balance Sheet is audited and annual report is submitted to the Income Tax department. In the present case the audit was conducted in the months of September - October, 2009 and on pointing out the discrepancy of valuation, the appellant suo moto paid the duty along with interest. Case of the appellant is squarely covered by Section 11A(2B), according to which the appellant should not have been issued any show-cause notice, as a result no penalty could have been imposed. I also agree with the learned Counsel of the appellant that show-cause notice has not alleged that the omission and commission of the appellant falls under the 4 corner of the ingredients of provision to Section 11A such as suppression of fact, mis-declaration, fraud, collusion, etc. with intent to evade payment of duty. - Decided in favour of assessee.
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