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TMI Blog2014 (5) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... ch) and it pertains to penalty imposed u/s 11AC of the CE Act amounting to Rs.1,15,155/-. 2. The brief facts, which can be culled out on perusal of the impugned order and on the basis of the arguments advanced by counsel for the appellant, are that the appellant is engaged in the manufacturing of Oxygen Gas and Dissolved Acetylene Gas falling under Sub-Heading 2804.10 & 2901.10 respectively of Central Excise Tariff Act. The claim of the respondent-revenue is that the assessee received additional consideration from their buyers in the name of "cylinder maintenance charges' and on account of the suppression/mis-declaration of assessable value of the excisable goods, they had short paid Central Excise duty amounting to Rs.10,13,699/- on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he additional sale consideration received from the buyers in the name of the maintenance charges. Though during the course of adjudication and after much persuasion, the assessee came out with the fact that it had collected the additional consideration of Rs.36,16,511/- in the name of maintenance and depreciation charges but insisted that these were maintenance charges. 4. It was also noticed by the revenue authorities during the course of adjudication proceedings that addition of Acetone in Dissolved Acetylene Gas Cylinder has nothing to do with the maintenance of cylinders but it works as a compressing agent to facilitate flow-out of Dissolved Acetylene Gas from the cylinder and this fact was never revealed to the department and the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value thereof-cum-duty price. 6. Dissatisfied with the said order, the appellant carried the matter in further appeal before the CESTAT, who also, vide order dt.01/11/2010 affirmed the penalty u/s 11 AC, however, it expressed the view that the appellant would be eligible for Modvat Credit of duty on the Acetone. Hence this appeal. 7. Ld. Counsel for the appellant submitted that the penalty u/s 11 AC is not automatic and merely because the appellant has been found liable to duty for one reason or the other, the penalty cannot be imposed. He contended that the assessee was under the bonafide belief that the maintenance charges as also the rental charges so also Acetone, is not liable to be included and on such bonafide belief, no penalty in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iable to pay duty as determined under sub-section (2) of section 11A, shall also be liable to pay a penalty equal to the duty so determined: 2[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 shall be twenty-five per cent of the duty so determined: Provided further that the benefit of reduced penalty under the first proviso shall be available if the amount of penalty so determined has also been paid within the period of thirty days referred to in that proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y refunded by reasons of fraud, collusion or any willful mis-statement or suppression of facts, or contravention of any of the provisions of this Act or of the rules made thereunder with intend to evade payment of duty...... On perusal of the facts, which have been noticed by us and which have been observed herein above, it clearly transpires that the aforesaid facts of inclusion of cylinder rental charges, cylinder maintenance charges and Acetone, were not at all disclosed by the appellant in the facts disclosed during the course of their filing of the return in Form RT-12. Not only in the said returns but also later on, when questioned on the basis of the audit undertaken by the audit team of AG Rajasthan, the assessee went on denying the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich remained, is as to whether the cylinder maintenance charges" being collected from all the customers and which represented the value of the Acetone used for dissolving Acetylene are includible in the assessable value or not. When the products being sold is dissolved Acetylene gas and the Acetylene gas for being marketed is required to be dissolved in Acetone, the Acetone would have been treated as an input for the Acetylene which is marketed and, therefore, the CESTAT has rightly held that the cost of Acetone would be includible in the assessable value. We are in full agreement with the finding of the CESTAT which is based on facts found by it so also by the First Appellate Authority that in the present case, the duty demand has been up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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