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2024 (3) TMI 557 - CESTAT MUMBAILevy of penalty u/s 11AC of Central Excise Act, 1944 - mistake/ inadvertence - duty liability from January 2009 onwards was being discharged on lower values by applying appropriate rate of duty to value derived from CAS 4 of 2008 - HELD THAT:- The appellant was not unaware of requirement to adhere to ‘cost construction’ in ascertainment of value of the impugned clearance with proceedings having been initiated in 2004 against them. They had paid differential duty, too, after CAS 4 certification for 2008 having been obtained. It is apparent that they were in possession of CAS 4 certification for subsequent years and these did indicate increased cost of production with corresponding duty implications from which it can be inferred that it was the burden of such enhanced liability that prompted resort to outdated certification. No justification for such overlooking has been brought on record and here exists only plea of oversight. That the onus of countering the ingredients for resort to such penalty does not devolve on the appellant from having been aware of propensity of theirs, from experience of the past, to indulge in such evasion is neither logically acceptable nor legally tenable. However, it is on record that the appellant had, upon being prompted and before issue of notice, made good the differential duty with interest. It is also on record that credit of such duty had been enabled by issue of supplementary invoices thereafter. It is not the case of Revenue that proceedings for recovery of such credit had been initiated or concluded from which it may be inferred that entitlement to credit was undeniable. It is of no less relevance to note that, though penalty has been imposed under section 11AC of Central Excise Act, 1944, this is not an autonomous provision empowering imposition. On the contrary, devolution and extent thereof are controlled by section 11A of Central Excise Act, 1944 and implicit therein is cause and effect as set out in the recovery provision. In these circumstances, with the discharge of differential duty liability along with interest, on their own determination, by the appellant, section 11(B) of Central Excise Act, 1944 for the period upto 7th April 2011 and section 11A(3) of Central Excise Act, 1944 will come into operation to dispense with notice owing to lack of any duty or interest liability beyond that appropriated in the impugned order. Appeal is allowed by setting aside the penalty under section 11AC of Central Excise Act, 1944.
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