TMI Blog2017 (1) TMI 364X X X X Extracts X X X X X X X X Extracts X X X X ..... to pay duty is a condition precedent for imposing penalty - penalty set aside - appeal dismissed - decided against Revenue. - E/60351/2016 - A/61639/2016-SM[BR] - Dated:- 27-10-2016 - Mr. Ashok Jindal, Member (Judicial) Sh. Satya Pal, AR for the respondent Ms. Krati Somini, Advocate for the appellant ORDER Per Ashok Jindal Revenue is in appeal. 2. The facts of the case are that during the course of audit it was observed that the respondent is not maintaining separate account of inputs/inputs services used in manufacture of dutiable as well as exempted final products. Therefore, it was objected that the respondent was required to pay 5%/6% of the value of exempted goods cleared by them which the appellant paid alo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use notice, therefore, the penalty on the respondent is not impossible in the light of the decision of the Geneva Fine Punch Enclosures Ltd. (supra) wherein the Hon ble Karnataka High Court has observed as under:- 5. As it is clear from Section 11-A after a notice is issued under Section 11 (A) (C), the assessee has a right to make a representation contesting the claim. It is, thereafter, under Section 11(A)(2) the Central Excise Officer after considering the representation, if any, made by the person on whom notice is served, determining the amount of duty of excise due from such person and thereupon such person shall pay the amount so determined. Section 11A(C) makes it clear that the liability to pay the penalty arises on the person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in the case of Force Motors Ltd. (supra). This Tribunal again examined the issue and observed as under:- 5. I have carefully considered the submissions made by both the sides. As regards appeal No. E/361/10, it is observed that the show cause notice was issued only for demand of interest and penalty as the Cenvat credit was suo motu paid by the appellant. In this fact, I find that the determination of demand was not made under Section 11A(2). Section 11AC can be invoked only in cases where the demand is determined under Section 11A(2). Section 11AC is reproduced below:- Section 11AC. Penalty for short-levy or non-levy of duty in certain cases.:- (1) The amount of penalty for non-levy or short-levy or non-payment or s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sub-section (10) of Section 11A, then, the amount of penalties and interest payable shall stand modified accordingly and after taking into account the amount of duty of excise so modified, the person who is liable to pay duty as determined under subsection (10) of Section 11A shall also be liable to pay such amount of penalty or interest so modified. Explanation- For the removal of doubts, it is hereby declared that in a case where a notice has been served under sub-section (4) of Section 11A and subsequent to issue of such notice, the Central Excise officer is of the opinion that the transactions in respect of which notice was issued have been recorded in specified records and the case falls under sub-section (5), penalty equal to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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