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TMI Blog2014 (5) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... illaries Private Ltd., [hereinafter referred to as 'the assessee'] are engaged in the manufacture of two wheeler components falling under Chapter 8714.00 of the Central Excise Tariff Act, 1985. 3. The officials of the Central Excise Department inspected the records maintained by the assessee. During the course of such inspection, it was found that the assessee manufactured and delivered certain capital goods such as Press Tool (Soft) for Reinforcement Pivot Tube and Prototype Development Tooling valued at Rs. 92,513/- to M/s. TVS Motor Company, Mysore and claimed exemption for the same under Notification No. 67/1995-Central Excise dated 16th March, 1995. Further verification revealed that duty has not been paid on the manufacture of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of duty?" 6. We have heard the learned counsel for the parties. Consideration 7. The payment of differential duty by the assesssee was pursuant to the inspection conducted by the Department. Therefore, it is clear that it was not a voluntary payment. 8. The Assessing Authority was of the view that the assessee was liable to pay interest and penalty. The Appellate Authority fallowing an earlier order, set aside the said finding. 9. The CESTAT by way of a brief order observed that it is settled law that no penalty could be imposed on the assessee for clandestine removals when the duty due is paid before the issuance of show cause notice. 10. The core issue is whether the assessee would be absolved from the liab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mills [JT 2009 (7) SC 314 = 2009 (238) E.L.T. 3 (S.C.)] observed that mere payment of differential duty whether before or after the show cause notice would not alter the situation and they would be liable for penalty in case the conditions for imposing such penalty spelt out in Section 11AC of the Act is attracted. 15. The Supreme Court in Rajasthan Spinning and Weaving Mills very categorically observed that penalty under Section 11AC as the very word suggests, is punishment for an act of deliberate deception by the assessee with the intent to evade duty by adopting any of the means mentioned in the section. The Supreme Court by interpreting the earlier judgment in Union of India v. Dharamendra Textile Processors, [2008 (231) E.L.T. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under sub-section (2) of Section 11A, shall also be liable to pay a penalty equal to the duty so determined : Provided that where such duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the order of the Central Excise Officer determining such duty, the amount of penalty liable to be paid by such person under this Section be twenty-five per cent of the duty so determined." 19. A reading of the provision of Section 11AC indicates that where such duty as determined under sub-section (2) of Section 11A, and the interest payable thereon under Section 11AB, is paid within thirty days from the date of communication of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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