2009 (5) TMI 15 - SC - Central Excise

Once the conditions specified u/s 11AC of the Central Excise Act are satisfied, penalty becomes mandatory and there is no scope of discretionary power - payment of differential duty, whether before or after the show cause notice is issued, can not alter the liability for penalty - the conditions for which are clearly spelled out in section 11AC of the Act - the stand taken by the CESTAT (Tribunal) has been rejected by the Apex Court in which tribunal waived the penalty stating that "the assessees had made payment of the demands simply in order to buy peace and to avoid any litigation. In those circumstances the imposition of penalty was wholly unjust, unwarranted and unauthorised in law".