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TMI Blog2018 (3) TMI 1546X X X X Extracts X X X X X X X X Extracts X X X X ..... s the goods were high valued pharmaceutical ingredients valued at Rs. 2,60,24,448/- which should have suffered duty of Rs. 32,16,662/-. Subsequently search at the factory premises resulted into detection of excess of stock valued at Rs. 1,21,005/- and both these goods (where duty was allegedly short paid, and goods found in excess) were seized alongwith vehicle used for transportation of goods (on which duty was short paid). Further, there was some shortage detected in the factory of dutiable Rs. 7,03,055/-, on which duty applicable is Rs. 86,914/-. 3. The appellant at the investigation stage itself, deposited the duty of (Rs.33,03,536/- (Rs.32,16,622/- paid on 25/07/2014 + Rs. 86,914/- paid on 02/08/2014) and got released the seized goods including vehicle on 12/08/2014, after execution of bond for Rs. 2.70 crore, and bank guarantee of Rs. 67.5 lakhs. Thereafter, a show cause notice was issued on 16/01/2015 proposing confiscation of seized goods including vehicle, confirmation of duty already paid and imposition of equal mandatory penalty. 4. Before the adjudication of said show cause notice, Finance Bill 2015 was introduced and newly substituted Section 11AC of Central Excise A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mand alongwith interest and also a penalty of 15% of the duty demand, before the adjudication of the show cause notice, then the proceedings against the said assessee should be deemed as closed. It means that even if a adjudication order to show the disposal of the show cause notice, needs to be issued, the adjudicating authority has got no right to further impose any penalty other than 15% of the penalty envisaged in the said Section, already paid by the assessee. In the present case, the duty demand of Rs. 33,03,536/- (Rs.32,16,622/- paid on 25/07/2014 + Rs. 86,914/- paid on 02/08/2014) was discharged by the appellant before the due date of payment, that is to say the duty liability of goods removed, in the month of July, 2014, is due by 5th August, 2014 and it is paid before this due date, and therefore, no interest liability is applicable on this duty demand. Further, they have paid 15% penalty of Rs. 4,96,000/- within one month of coming into existence of the new provisions and also before the adjudication of the case and these payments in itself are sufficient for the closure of the proceedings against them. 11. On going through impugned OIO, it is felt that the Adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the factory, the duty paid on the same may be allowed as credit so that when the same is removed again, it is not subjected to double duty, Considering the particular circumstances in which the duty paid goods are brought back to factory and also to avoid double taxation, the appellant is allowed to take credit of the duty applicable/paid only on the returned goods with the condition that they should follow the procedure of accounting and further payment of duty on removal as stipulated in Rule 26 of Central Excise Rules, 2002. 13. However, there is an exception to the applicability of above Section, in respect of excess stock of finished goods valued Rs. 1,21,005/- found during the search of the factory, as there is no duty demand raised in the show cause notice in respect of these excess goods and there is only a proposal to confiscate the same. In other words, whatever duty, interest and penalty deposited by the appellant, is not covering the duty liability of the said excess stock and this is because no duty is demanded on the said goods as it was not removed from the factory. At the same time, since these goods were found unaccounted, they were liable for confiscation and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The learned AR also relies on the ruling in the case of CCE, CUS & ST Vs. Steel Engineering Co. in CEA Defective No.32 of 2014 being order dated 07/03/2014 of Hon'ble Allahabad High Court and in the case of Hon'ble Supreme Court in M.P. Agencies Vs. State of Kerala - 2015 (318) E.L..T 22 (S.C.) and Larger Bench of this Tribunal in Copper Rollers Pvt. Ltd., Bombay Vs. CCE, Bombay - 1983 (13) 981 (CEGAT). 8. The learned Counsel appearing for the respondent states that the impugned order is just and legal and there is no impropriety. The learned Counsel refers to the provisions of Section 11AC, as amended, wherein in Clause (d) it is provided as follows : "where any duty demanded in a show cause notice and the interest payable thereon under Section 11 AA, issued in respect of transactions referred to in clause (c), is paid within thirty days of the communication of show cause notice, the amount of penalty liable to be paid by such person shall be fifteen per cent of the duty demanded, subject to the condition that such reduced penalty is also paid within the period so specified and all proceedings in respect of the said duty, interest and penalty shall be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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