TMI Blog2016 (3) TMI 400X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants to have had bonafide belief that duty is not payable on the free supply of goods in view of the decision of the Tribunal in the case of Vinayaka Mosquito Coil Mfg. Co. (2004 (8) TMI 179 - CESTAT, BANGALORE ). As the issue was under dispute and was finally settled only later by the decision of the Larger Bench in the case of Indica Laboratories Pvt. Ltd (2007 (5) TMI 19 - CESTAT,AHMEDABAD ) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral Excise Act, 1944. Apart from clearing the goods on payment of duty, the Appellants are also supplying goods free to their distributors. Such free supplied goods are also having MRP printed on the same. However, the Appellants did not pay the Central Excise duty on such free supplied goods on the ground that this is quantity discount . Both Appellants also intimated vide their letters dt.14.06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.08.2007, wherein the Adjudicating authority confirmed the said duty alongwith interest and imposed equal amount of penalty under Section 11AC. The Commissioner (Appeals) upheld the Adjudication orders by the impugned OIAs both dt.20.06.2008. Aggrieved by the same, the Appellants are before us. 2. Heard both the sides and perused the records. 3. The learned Counsel at the outset itself, sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at it is settled law that when the issue was under dispute, and there was bonafide belief on the part of the Assessee, penalty cannot be invoked under Section 11AC. The learned Advocate also relied upon the decision of this Bench of the Tribunal in the case of Redson Pharmaceuticals Ltd Vs Commissioner, Central Excise, Ahmedabad - 2009 (13) STR 292 (Tri-Ahmd). 4. On the other hand, learned Auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Bench in the case of Indica Laboratories Pvt. Ltd (supra), imposition of equivalent penalty under Section 11AC is not justified. Hence, we set aside the imposition of penalty under Section 11AC in respect of both the appeals. The impugned orders are upheld with the said modification. 6. Both appeals are disposed of in the above terms. (Operative part of the order pronounced in the open c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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