TMI Blog2010 (6) TMI 413X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri S.N. Singh, JCDR, for the Respondent. [Order]. - The facts leading to this appeal are in brief as under : 1.1 The appellants are engaged in the manufacture of electrical stamping and lamination falling under chapter heading 8504, 9010 of Central Excise Tariff. The appellants' factory premises were visited by the jurisdictional central excise officers on 28-12-2005 when the stock of finished goods was checked in the presence of two panch witnesses. On checking the stock of finished goods, namely stamping lamination, shortage of 7271.30 kg involving central excise duty of Rs. 2,07,666/- was found. Enquiry was made with the Managing Director of the appellants, who accepted the shortage but stated that the shortage may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71.30 kg of electrical lamination was found as against the recorded balance in the RG-1 register, that this shortage is not the real shortage as the same may be due to wrong recording of weight and the fact that there was no stock taking conducted for the finished goods lying in the factory, that the appellants still had paid the entire duty even prior to the issuance of SCN, that there is no clandestine removal as merely on the basis of shortage it cannot be alleged that the goods found short had been removed clandestinely, that clandestine removal has not been admitted by the managing director of the appellant company and that in any case, if it is held that the shortage was due to clandestine removal, the first proviso to Section 11AC wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this regard, he relies upon judgement of the Hon'ble Supreme Court in the case of CCE, Madras v. Systems Components Pvt. Ltd. reported in 2004 (165) E.L.T. 136 (S.C.), that just because the appellants paid the entire duty prior to issue of SCN they cannot escape the penal provisions of Section 11AC; that he also relies upon the judgment of the Hon'ble Supreme Court in the case of Union of India v. Rajasthan Spinning Weaving Mills reported in 2009 (238) E.L.T. 3 (S.C.) wherein it was held that once the provisions of Section 11AC are attracted, the penalty has to be imposed, that under Section 11AC, there is no scope to reduce the penalty and in this regard he relies upon the judgment of the Hon'ble Supreme Court in the case of Union of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Hon'ble Delhi High Court in the case of K.P. Pouches (P) Ltd. and in Malbro Appliances P. Ltd. (supra) only penalty equal to of 25% of the duty amount must be imposed in terms of Section 11AC. 5.3As per the first proviso to Section 11AC, where such duty as determined under sub-section (2) of Section 11A(1) and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order, the amount of penalty payable by such person under this section shall be 25% of the duty so determined provided penalty equal to 25% of duty is also paid within 30 days referred to in the proviso. Thus, when on account of clandestine removal or evasion of duty by wilful mis-statement or suppression of facts on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndra Textile Processors (supra), there is no discretion available to the appellate adjudicating authority to reduce the penalty. However, Hon'ble Supreme Court in this case has held that once the provisions of Section 11AC are attracted there is no scope to reduce the penalty and this judgement has not taken into account the first proviso to Section 11AC which itself provides for reduced penalty in a situation where the entire amount of duty alongwith interest if any payable and penalty equal to 25% of duty demand confirmed is paid within thirty days from the date of communication of the order. 5.4 In view above discussion, while the Commissioner (Appeals)'s order upholding the duty demand and penalty under Section 11AC is upheld, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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