TMI Blog2013 (11) TMI 985X X X X Extracts X X X X X X X X Extracts X X X X ..... the order - Provisions of Section 11AC are attracted and hence the penalty under this Section has been correctly imposed. The appellants pleaded that since in the case the entire duty demand on goods found short had been paid before the issue of show cause notice and no option to pay reduced penalty under proviso to Section 11AC has been given – Relying upon K.P. Pouches (P) Ltd. vs. Union of India [2008 (1) TMI 296 - HIGH COURT OF DELHI] - the appellant company cannot be denied the benefit of reduced penalty - the plea of learned Counsel of the appellant regarding applicability of proviso to Section 11AC is correct and, as such, the benefit of the proviso cannot be denied - Accordingly, the penalty under Section 11AC is reduced to 25% of the duty demand – Decided partly in favour of Assessee. - Appeal No. 3832-3833 of 2010 (SM) - Final Order No. 57916-57917/2013 - Dated:- 25-9-2013 - Shri Rakesh Kumar, J. For the Appellant : Shri V.K. Gupta, Advocate For the Respondent : Shri A.K. Jain, Authorized Representative (Jt. CDR) JUDGEMENT Per. Rakesh Kumar :- The appellant are manufacturers of copper wire rods, copper strips and copper scrap from copper ingots. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th interest and same amount of penalty was imposed. Beside this, the Additional Commissioner also imposed the penalty of Rs. 2,00,000/- on Shri Anurag Jain under Rule 26. Both the appellant firm as well as partner Shri Anurag Jain filed appeals to Commissioner (Appeals) challenging the order of imposition of penalty on them under Section 11AC/Rule 26. The Commissioner (Appeals) by the impugned order dated 1/11/10 upheld the penalty under Section 11AC on the appellant firms and penalty under Rule 26 on Shri Anurag Jain. Against this order of the Commissioner (Appeals), these two appeals have been filed. 2. Heard both the sides. 3. Shri V.K. Gupta, Advocate, the learned Counsel for the appellant, pleaded that the goods found short are those which had been accounted for in the RG-1 register and the shortage of various items of finished goods had been determined vis-`-vis the balance of those items recorded in the RG-1 register, that once the production of any final product has been recorded in the RG-1 register, the allegation of clandestine removal of the goods, if found short, cannot be made, that in respect of this plea made before the Commissioner (Appeals), he in para 12 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents have not been retracted, penalty under Section 11AC would be attracted, that just because the goods found short had been recorded in the RG-1 register, it does not mean that their clearance without payment of duty and without issue of invoices would not attract penalty under Section 11AC, that appellant having sufficient balance in the RG-23A register, or PLA would not make any different when the fact that the goods found short had been clandestinely removed without payment of duty stands admitted and his statements have not been retracted, that the finding of Commissioner (Appeals) in para 12 of the order that allegation of clandestine removal is not sustainable and is contrary to his finding in his very next sentence that the shortage on account of goods removed without payment of Central Excise duty, without invoice and without following the procedure would attract penal provision of Section 11AC, and that even if no appeal or Cross Objection, has been filed by the Department, in view of the facts of the case and evidence on record, penalty under Section 11AC has been correctly upheld. With regard to penalty on Shri Anurag Jain, it was pleaded that since by his own statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... because the production of those goods had been entered in the RG-1 register, it cannot be the defence of the appellant that there was no intention on his part to evade the duty. Similarly, the appellant having sufficient balance in the RG-23A register, cannot be the ground for concluding that there was no intention to evade the payment of duty. Though the Commissioner (Appeals) has given a wrong finding that this is a case of shortage of finished goods, as compared to recorded balance and not a case of clandestine removal of the goods, in the very next sentence, he has given a finding I observe that the shortage is on account of goods removed without payment of Central Excise duty, without issuance of proper invoice and without following the procedure laid down in this behalf. Accordingly, I am of the view that the penalty under Section 11AC of the Act ibid has rightly been imposed. In view of this, no cognizance of the earlier finding that this is not a case of clandestine removal, can be taken, and this has to be treated as a case of careless drafting the order. In the circumstances of the case, I hold that provisions of Section 11AC are attracted and hence the penalty under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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