9911796707
TMI Blog2010 (3) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... in the manufacture of cold-rolled/hot-rolled sheets, and mild steel plates during the material period. During the period from October 2000 to June 2001, they cleared their products to a sister unit on payment of duty. The department upon investigations found that the appellant had undervalued the goods by not taking into account the operational cost under Rule 8 of the Valuation Rules while determining the assessable value of the goods cleared to the sister unit. Accordingly, differential duty of over Rs. 80 lakhs was demanded for the said period in a show-cause notice dated 8-11-01 wherein a demand of interest on duty under Section 11AA of the Act was also raised besides a proposal for imposing penalty under Rule 173Q (1) of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount of duty in a gesture of fairness. However, the appellant has a strong case against the penalty in as much as they had no mala fide intention to evade payment of duty as found by both the lower authorities. It is further submitted that, as Cenvat credit of any duty paid by the appellant on the subject goods would be available to their sister unit, there was a revenue-neutral situation, wherein it could not be alleged that the appellant had intention to evade payment of duty. On the penalty-related issue, the ld. counsel has claimed support from Nagpur Alloy Castings Limited v. Collector of Central Excise [2002 (142) E.L.T. 515 (S.C.)] wherein the Supreme Court held that the imposition of penalty on the assessee, who had nothing to gain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act on the ground of such duty having been paid within the period prescribed under Sec. 11AA (1) of the Act. In other words, the duty paid is a payment for ever. In this scenario, we need only to consider the issues relating to penalty imposed under Rule 173Q and interest on duty, demanded under Sec. 11AA. 5. Under sub-section (1) of Sec. 11AA of the Act, as this provision stood at the material time, an assessee who fails to pay the duty determined under sub-section (2) of Sec. 11AA of the Act, within 3 months from the date of determination of duty is bound to pay interest at the prescribed rate for the period of delay. Sub-section (2) says that sub-section (1) is not applicable where the duty became payable on or after the date on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, a penalty under Rule 173Q in this case is irresistible. In this context, it is pertinent to note that, in the case of Punjab Tractors Ltd. (supra), the Apex Court maintained a penalty on the assessee on the ground of violation of certain provisions of the Central Excise Rules by them. However, in the peculiar facts and circumstances of the present case, a penalty of Rs. One lakh does not appear to be reasonable. There is a strong mitigating factor in this case, which is that the appellant readily paid the differential amount of duty after receipt of the order of adjudication and had no mala fide intention to evade payment of such duty as found by the lower authorities. We are of the view that in such circumstances, the quantum of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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