TMI Blog2015 (8) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... a penalty under Rule 57U read with Section 11AC of the Act. In fact, it is pertinent to note that even under Rule 57U of the Rules penalty is imposable only when there has been an intent to evade payment of duty. The factual finding arrived at in the impugned order has not been shown to be arbitrary or perverse. - Decision in the case of Commissioner of Central Excise, Mumbai-V V/s. Guru Plastics Work reported in [2009 (9) TMI 830 - BOMBAY HIGH COURT] and Rajasthan Spinning & Weaving Mills (2009 (5) TMI 15 - SUPREME COURT OF INDIA) followed - Decided against Revenue. - Excise Appeal No.8 OF 2008 - - - Dated:- 27-3-2015 - F. M. Reis M. S. Sanklecha, JJ. For the Petitioner : Ms. S. Linhares, Advocate For the Respondent : Mr. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfiscation. 4. Consequent to an inquiry carried out by the Department show case notice dated 2/06/1999 came to be issued to the respondent- Assessee. The show cause notice called upon the respondent- Assessee to show cause as to; (a) why Central Excise duty of ₹ 2.44 lakhs on the 4000 kgs of the said goods being removed clandestinely in the said tempo should not be recovered under Section 11A of the Act? (b) to disallow and recover inadmissible modva credit availed amounting to ₹ 72,599/- under Rule 57U of the Central Excise Rules, 1944 (Rules), (c) to impose penalty under the provisions of Rules 57U and Rule 173Q read with Section 11AC of the Act, and; (d) recover interest on the duty not paid under Rule 57U read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arance of the goods without payment of duty was on the basis of a bonafide belief that the said goods were not excisable. Besides, the impugned order also recorded the fact that as the entire amount of duty and interest had been paid before the issue of show cause notice no occasion to impose any penalty could arise. Thus the Tribunal by the impugned order set aside the penalty imposed upon the respondent-Assessee. Being aggrieved on dropping of the penalty the Revenue had filed the present appeal which was admitted on the substantial questions of law as mentioned herein above. 8. So far as question no.(1) is concerned, Ms. Susan Linhares, learned Counsel for the Revenue submits that in view of Section 11AC of the Act which was invoked a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he non-payment of duty arose on account of bonafide belief on the part of the respondent that no duty is payable on the said goods. Consequently, mandatory penalty under Section 11AC of the Act would not have any application where the non-payment of duty was bonafide. In such cases, authorities would be correct in not imposing any penalty. 10. So far as the question no.(2) is concerned, the learned Counsel for the respondent does not dispute the fact that merely because excise duty has been paid before the issue of show cause notice would not by itself warrant non-imposition of penalty. However, it is submitted that in the absence of any intent to evade duty no penalty can be imposed where duty has been paid prior to the issue of show ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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