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2016 (2) TMI 714 - AT - Central ExcisePenalties imposed under Section 11AC and Rules 25 and 26 of the Central Excise Rules - Duty was deposited before issuance of SCN - Held that:- As there is no dispute about the fact that such short payment, which according to the appellant has occurred inadvertently, on account of non-computation of the value of clearances, was detected by themselves only. The said fact of exceeding the exemption limit came to the notice of the appellant by way of their own audit. As such, in such a scenario, no mala fide can be attributed to the assessee. The differential duty already stands deposited by the appellant immediately after the detection of the mistake, along with interest. The demand of interest is in the nature of a penal action. I fully agree with the learned advocate that in such a scenario no other proceedings should have been initiated against the appellant. The legislative intent for creation of the said sub-section is to avoid any futile litigation, which purpose stands defeated by the lower authorities by issuing show cause notice to the appellant. Having said so we set aside the impugned orders of the authorities below upholding the penalties imposed under Rules 25 and 26 of the Central Excise Rules. Inasmuch as penalties stand set aside, imposed in terms of the above Rule, no infirmity can be found for non-imposition of penalty under Section 11AC. Accordingly the Revenue’s appeal is required to be rejected. - Decided in favour of assessee
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