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2017 (6) TMI 576 - AT - Central ExciseValuation - components of speedometer manufactured through job work - moulds and dyes were cleared on payment of duty based on assessable value as determined by the appellants - department issued a SCN for demanding differential duty on the goods based on CAS-4 value, with interest thereon, and for imposing penalty - whether the duty liability was short paid before issue of the show cause notice on 05.01.2006, whether penalty is imposable on the appellants under Section 11AC of the Central Excise Act and whether there was deliberate undervaluation of goods for the material period, without following CAS-4? Held that: - The Jurisdictional High Court of Madras in the case of Arun Vyapar Udyog Pvt. Ltd. Vs CESTAT Chennai [2013 (12) TMI 817 - MADRAS HIGH COURT] has held that discharge of duty liability before issuance of SCN is immaterial for application of Section 11AC. Undervaluation of assessable value by the appellant by not adopting CAS-4 valuation for as many as 22 months is nothing but a deliberate undervaluation with the intention of evading full duty liability required to be discharged under law. The acts and omissions of the appellant in this case are very much acts of fraud with intent to evade payment of duty. A continued hiatus of "twenty two" months can in no way explain the conduct of the appellant. Discernably therefore, the appellants knowingly and willfully adopted lesser assessable/transaction value in contravention of Rules 4 & 8 of Central Excise (Valuation) Rules, 2000 read with Rule 8 of Central Excise (Valuation)Rules, 2000. Such undervaluation over a period of one and half years resulting in evasion of duty of ₹ 60,18,344/- calls for levy of penalty. All the provisions of Section 11AC ibid will apply to this case, hence there cannot be any discretion in the imposition of penalty equal to the differential duty determined. Appeal dismissed - decided against appellant.
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