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TMI Blog2018 (5) TMI 1669X X X X Extracts X X X X X X X X Extracts X X X X ..... ubstantial question of law was framed: "Whether the Customs, Excise and Service Tax Appellate Tribunal was right in upholding levy of 100% penalty under Section 11AC of the Excise Act, 1944 notwithstanding that the entire payment of disputed tax was paid by the appellant on or before passing of the order-in-original?" 3. In our opinion, the question raised is covered by the decision of the Supreme Court in Union of India versus Rajasthan Spinning and Weaving Mills, 2009 (238) ELT 3 (SC) and judgment of Division Bench of this Court in Commissioner of Central Excise Delhi-I versus Prabhat Zarda Factory (I) Private Limited, 2012 (281) ELT 665 (Delhi). 4. The undisputed factual position is that the appellant was a manufacturer of S.S. ingot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order-in-original and the demand raised. 5. These demands and adjudication order have been affirmed by the Tribunal by the impugned order with one modification that the redemption fine imposed on M/s Shree Shyam Cutter and M/s Shree Ganesh Cutter have been reduced from Rs. 6,50,000/- and Rs. 10,50,000/- to Rs. 3,50,000/- and Rs. 6,50,000/-, respectively. Personal penalty imposed on Mr.Ram Lal Aggarwal, Director of the appellant, Ravinder Kumar Aggarwal and Anil Kumar Garg, sole proprietors of M/s Shree Shyam Cutter and M/s Shree Ganesh Cutter have been reduced to Rs. 1,00,000/- each. 6. On merits whether the addition was justified or not, we have declined to interfere as was recorded in our order dated 19th February, 2018. This order ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to imposition of penalty equal to the amount by which duty was short paid. In our view the reason assigned by the Tribunal to strike down the levy of penalty against the assessees is as misconceived as the interpretation of Dharamendra Textile is misconstrued by the Revenue. We completely fail to see how payment of the differential duty, whether before or after the show cause notice is issued, can alter the liability for penalty, the conditions for which are clearly spelled out in Section 11AC of the Act. XXXX XXXX 5. In our view the reason assigned by the Tribunal to strike down the levy of penalty against the assessee is as misconceived as the interpretation of Dharmendra Textile is misconstrued by the Revenue. We completely fail to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions that came up for consideration in that decision." 8. Thus, the payment of duty, whether made before or after issuing of show cause notice, is not determinative and a relevant factor for deciding whether or not penalty should be imposed under Section 11AC of the Excise Act. This issue is to be decided having regard to the satisfaction or non-satisfaction of the conditions stipulated in Section 11AC of the Act. The pre-conditions which have to be satisfied are fraud, misrepresentation, suppression of facts and contravention of the Act and Rules. This position has been clearly stated in Prabhat Zarda Factory (I) Private Limited (supra). 9. We would also record that Supreme Court in Rajasthan Spinning and Weaving Mills (supra) has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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