TMI Blog2007 (8) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... hri Anjay Kothari, for the Respondent. [Judgment per : Maheshwari, J.]. - This appeal has been preferred by the Union of India through the Commissioner, Central Excise, Jaipur-II under the then existing Section 35G of the Central Excise Act, 1944 ('the Act of 1944') being aggrieved by the order dated 28-3-2005 made by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi ('the Tribunal') in Appeals Nos. E/4167-68/04-NB(SM) reducing the penalty imposed upon the respondent No.1-assessee under Section 11AC of the Act of 1944 to an amount of Rs. 50,000/- and has set aside the order of imposition of penalty on the General Manager of the respondent -assessee. 2. This appeal was admitted on 8-8-2006 while formulating the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacture of such exempted final products al the time of their clearance. However, the respondent assessee had cleared the exempted goods, i.e., the dyed cotton yarn but had not paid an amount equivalent to the Cenvat credit attributable to inputs used in the manufacture of such exempted cotton yarn at the time of their clearance. 4. According to the appellant, the General Manager of the respondent-assessee in his voluntary statement recorded on 11-1-2003 under Section 14 of the Act of 1944 admitted that all the work relating to Central Excise was carried under his supervision; and further admitted that they were using the common inputs in the manufacture of dutiable as well as exempted final products and have not reversed the Cenv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 19-8-2003 that the assessee had already debited the amount voluntarily (Rs. 1,61,010/- on 11-1-2003 and Rs. 1,45,564/- on 15-1-2003). The said adjudicating authority also imposed penalty equivalent to the amount of Cenvat credit under Rule 13(2) of the Cenvat Credit Rules, 2002 read with Section 11AC of the Act of 1944, also ordered recovery of interest under Rule 12 of the said Rules read with Section 11AB of the Act; and further imposed penalty of Rs. 25,000/- on the General Manager of the assessee under Rule 26 of the Central Excise Rules, 2002. 8. The assessee and the said General Manager filed appeals before the Commissioner (Appeals-II), Customs Central Excise, Jaipur. The appellate authority by his order dated 11-6-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een found by the authorities and confirmed by the learned Tribunal, there was no occasion for reducing the amount of the penalty. It is contended that reduction of the penalty imposed under Section 11AC of the Act of 1944 remains contrary to the statutory requirements and contrary to the dictum of the Hon'ble Supreme Court in the case of M/s. Sony India Limited v. C.C.E., Delhi - 2004 (167) E.L.T. 385. 11. As noticed at the outset, this appeal was admitted on 8-8-2006 particularly on the question as to whether there was any discretion with the authorities under the Act to reduce the penalty at less than equal the duty determined, when it is found that the penalty is otherwise imposable under Section 11AC? 12. During the course o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... show cause notice and the order of adjudicating authority order dated 19-8-2003 does not determine any other amount of excise duty due under Section 11A(2) of the Act of 1944 and, therefore, no penalty could be validly sustained under Section 11AC. It has also been contended that the finding on intention to evade the duty is based on surmises and assumptions and without any material to support the same. It has been urged that the fact that reversal of the Cenvat credit was made voluntarily by the appellant, and the amount of reversal was accepted by the adjudicating officer shows the bona fide of the appellant justifying non-levy of any penalty under Section 11AC of the Act of 1994. 14. An application under Section 5 of Limitation Act h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of 1944 because the assessee had deposited the amount of duty on being detected by the Department before issuance of show cause notice; and while referring to various decisions on the point, the Division Bench of this Court has observed:- "The proposition appears to be well settled that where the duty has been deposited before issuance of show cause notice under Section 11A Section 11AB of the Central Excise Act, 1944, no action under Section 11AC of the said Act for imposition of penalty can be initiated or taken. The reason is obvious. As on the date show cause notice is issued, there is no short levy of Duty for which such notices can be issued." 17. The fact that the duty was deposited before issuance of show cause noti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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