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TMI Blog2018 (11) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under Section 11AC, Revenue has filed the present appeal. 2. After hearing the learned A.R. appearing for the Revenue and after going through the impugned order, we note that the Adjudicating Authority has not imposed any penalty on the appellant under Section 11AC of the Act, by observing as under:- "I find that penalty under Section 11AC can be imposed only in the cases where invocation of proviso to Section 11A(1) sustains. In the show cause notice extended period has been invoked on the ground that the party suppressed the vital facts in the ER-1 returns with intent to evade payment of duty. As to the aforesaid allegation, the party contended that the lapse had taken on their part but it was not deliberate and it took place on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount, they paid the same towards the liability of duty and interest. Hence, I agree that non-payment of duty immediately on manufacture was bona fide mistake on their part and it is a case where proviso to Section 11A is not applicable in facts and circumstances of the case. If the party has filed "Nil" ER-1 it was because there was no physical manufacture or clearance of goods in their factory. Deciding the issue of mandatory penalty under Section 11AC of the Act, Hon'ble High Court of Karnataka in case of Commissioner of Central Excise, Bangalore-II vs. Saravana Alloys Steels (P) Ltd. 2011 (269) E.L.T. 71 (Karnataka) held that 'Though the relevant Rule provides that the penalty is liable to be paid if the assessee fails to pay duty with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention to evade the payment of duty, a penalty cannot be imposed". Further, in the case of M/s Castrol India Ltd. vs. Commissioner, Central Excise, Raigarh [2011 (269) E.L.T. 403 (Tri.-Mum.)], relying on the judgment of Hon'ble Supreme Court in case of M/s Rajasthan Spinning and Weaving Mills [2009 (238) E.L.T. 3 (S.C.)] it was held by the CESTAT, Mumbai that mandatory penalty under Section 11AC is imposable when it has been ascertained that the duty has been evaded by way of fraud, collusion, willful misstatement, suppression of facts or contravention of provisions of the Act and Rules with intent to evade payment of duty. The Tribunal observed that as the assessee himself have paid the duty and came forward to inform the department bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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