TMI Blog2010 (3) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... n 11AB of the Act on that part of the amount of duty which pertains to the period from 11-5-01 to 30-6-01 and such interest shall be paid for the period from the due date to the date of payment (20-4-02). Penalty - Held that: - there was admittedly undervaluation of the goods, whether deliberate or not - The undervaluation, per se, amounted to breach of Rule 173F of the CER, 1944 and the same would attract the penal provisions of Rule 173Q. Therefore, penalty u/r 173Q in this case is irresistible - however, a penalty of Rs. One lakh does not appear to be reasonable, We reduce the penalty to ₹ 10,000/-. For the limited purpose of requantification of the amount of interest, we send this case back to the original authority - appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the sister unit was slitting, which, according to them, did not amount to manufacture. In other words, duty liability was denied in respect of the goods cleared to the sister unit. The proposals for levy of interest on duty and for imposition of penalty were also contested on numerous counts. In adjudication of the dispute, the Asstt. Commissioner by order dated 13-2-2002 confirmed the demand of duty amounting to Rs. 80,20,336 against the assessee under Sec. 11A of the Act with a demand of interest thereon under Sec. 11AA of the Act, besides imposing a penalty of Rs. One lakh on the assessee under Rule 173Q of the Central Excise Rules. Upon receipt of the Order-in-Original, the party paid the above amount of duty on 20-4-2002, a fact wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in as much as the duty was paid within the period of 3 months prescribed under sub-section (1) of Section 11AA. 3. On the other hand, the ld. JDR submits that the appellant is liable to pay interest on duty under Sec. 11AB, if not under Sec. 11AA. It is also submitted that the imposition of penalty on the appellant is justifiable in view of the Supreme Court s judgment in Punjab Tractors Ltd. v. Commissioner of C. Excise, Chandigarh [2005 (181) E.L.T. 380 (S.C.)] wherein a penalty on the assessee was sustained on the ground that they had admittedly committed breach of the provisions of Rule 57C and Rule 57F of the Central Excise Rules, 1944. It is argued that the Apex Court did not consider mens rea. 4. In his rejoinder, the ld. Sr. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under sub-section (1) of Sec. 11AA on the amount of duty paid by the assessee for the period upto 10th of May, 2001. In respect of the amount of duty paid for the period from 11-5-2001, interest on duty is leviable under Sec. 11AB of the Act in as much as sub-section (1) of Sec. 11AA opens with the clause subject to the provisions of Sec. 11AB . In the result, interest can be levied on that part of the amount of duty which pertains to the period from 11-5-2001 to 30-6-2001. This liability, obviously, is unaffected by the fact that such duty was paid within the period of 3 months prescribed under Sec. 11AA(1). It is, therefore, held that the appellant is liable to pay interest under Sec. 11AB of the Act on that part of the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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