TMI Blog2010 (1) TMI 1089X X X X Extracts X X X X X X X X Extracts X X X X ..... of quantity of raw material consumed from April, 2004 to the date of their visit (25-8-2004). In the absence of records relating to the final products, officers ascertained the input-output ratio from the respondent and used it for arriving at the total quantity of finished goods manufactured during the said period. The aforesaid quantity of 61,685 kg was arrived at on this basis. These particulars were stated in a panchnama dated 25-8-2004, in the presence of independent witnesses. Statements of three functionaries of the company were also recorded under Section 14 of the Central Excise Act. In these statements, the supervisor, the excise officer and the Director of the company, accepted the shortage of 61,685 kg of finished goods found by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of dispute with intent to evade payment of duty was established in this case and, therefore, a penalty equal to duty under Section 11AC of the Act is unavoidable. In this connection, it is also submitted that the penal liability is not altered by the factum of duty having been paid prior to issue of the show-cause notice. The JDR relies on the apex court s decision in Union of India v. Rajasthan Spinning and Weaving Mills - 2009 (238) E.L.T. 3 (S.C.). 3. On the other hand, the learned Consultant for the respondent submits that the burden was on the department to prove the charge of clandestine removal of finished goods, against the respondent. According to the Consultant, the department failed to establish their case of cland ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vade payment of duty. On this basis, the notice, inter alia, proposed a penalty on the party under Section 11AC of the Act. This proposal was contested. The original authority imposed a penalty equal to duty on the respondent under the above provision of law. The appellate authority set aside this penalty after noting that the party had paid the duty amount before issue of the show-cause notice and that there was no evidence of any mala fides on their part. The learned Consultant has argued in support of this decision of the lower appellate authority. He has submitted that the burden of proof is on the department in a case of alleged clandestine removal of excisable goods. According to him, this burden was not discharged by the Revenue in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent, it was not open to the appellate authority to set aside the penalty on the ground that the duty had been paid prior to the issue of the show-cause notice. In this connection, the ruling of the apex court in Rajasthan Spinning Weaving Mills s case (supra) supports the Revenue. In that case, it was held that, where the condition for penalty under Section 11AC was established, a penalty on the assessee was mandatory and such penal liability was not affected by considerations like payment of duty before or after the show-cause notice was issued. The decision of the lower appellate authority, on this aspect, cannot be sustained. That authority has relied on the Tribunal s decision in Rashtriya Ispat Nigam Ltd. (supra) but that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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