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2022 (8) TMI 1154 - AT - Central ExciseValuation - adoption of valuation in respect of their finished goods cleared to depot at Gaziabad Branch on the basis of transaction value under Section 4 (1)(a) of the Central Excise Act, 1944 instead of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 as amended - suppression of facts or not - levy of equal amount of penalty imposed under the provisions of Rule 25(1)(d) of the Central Excise Rules, 2002 read with Section 11AC of the Central Excise Act, 1944 - HELD THAT:- In the peculiar facts and circumstances of this case, the plea for vacating the penalty is tenable. The substantive dispute between the Department and the Assessee revolved around the question whether valuation adopted by the assesse on the basis of transaction value under Section 4(1)(a) of the Central Excise Act, 1944 or should have followed the provisions of Rule 7 of the Central Excise Valuation (Determination of price of Excisable Goods) Rules, 2000. The penalty provision stands attracted where duty of excise has not been levied or paid or has been short-levied or short-paid by the reason of fraud, collusion or any willful mis-statement or suppression of facts or contravention of any of the provisions of the Act or the Rules made thereunder with intent to evade payment of duty. Thus, the prerequisite being there should be material to establish either fraud, collusion or willful mis-statement or suppression of facts or contraventions of the provisions of the Act or the Rules and all these have been committed with an intent to evade payment of duty. In the show cause notice dated 10-06-2016, except for stating that the assessee has contravened the provisions of the Rules, there is no specific allegation so as to hold the assessee guilty of having committed fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. The authority is bound to record a prima facie finding that there was an intent to evade payment of duty by suppressing the material facts or by making wilful misstatement or by committing fraud or collusion. Thus, in the absence of any such specific allegation in the show cause notice, the authority cannot mechanically impose penalty under Section 11AC of the Act - The provisions of Section 11AC of the Act are attracted in the event of establishing fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. This has not been done in the present case. Tribunal has all along taken a consistent view that when the entire demand along with applicable interest has been paid by the Appellant before issuance of show-cause notice, there was no occasion to issue any show-cause notice - the penalty is set aside - appeal allowed.
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