- (1.) The respondent is a manufacturer of polypropylene compounding falling under Chapter heading(39 of the Schedule to the Central Excise Tariff Act, 1985. It was noticed that for the years ending 31-3-1997, 31-3-1998 and 31-31999, forged entries were shown in RG-I register. Show cause notice dated 196-2001 was issued under Section 11A of the Central Excise Act, 1944 (for short "the Act"), requiring the assessee to show cause why additional duty and penalty be not imposed.
(2.) After considering the view point of the assessee, the adjudicating authority held that the party had clandestinely removed finished goods without issue of invoice and without payment of duty. Interest and penalty was levied thereon wilfully and intentionally evading payment of duty. The said duty was however, deposited without any protest on 23-5-2001 prior to the show cause notice dated 19-6-2001. The adjudicating authority concluded as under: I come to the unmistakable conclusion that the differential quantity has been surreptitiously removed without following the prescribed Central Excise procedure and without payment of duty. In view of this I hold that the sum of Rs. 1,12,900/- demanded from the notice by invoking the extended period in terms of first proviso to Section 11A of Central Excise Act 1944 is liable to be demanded under this provision and the sum of Rs. 56,927.28 sought to be recovered towards interest under Section 11AB ibid is liable to be recovered. I also hold that notice is liable to be penalized under Section 11AC, ibid.
(3.) Thereafter, penalty of Rs. 1,12,900/- under Section 11AC was imposed. On appeal, Commissioner, Central Excise (Appeal) set aside the order of penalty, holding that the assessee had already deposited the duty fixed before issuance of show cause notice and as such, imposition of penalty is not called for. In view of the decision of the Tribunal in CCE Madurai v. Jkon Engg. Ltd. and Ashok Leyland Ltd. v. CCE, Chenni, the revenue preferred an appeal, which was dismissed by the Tribunal.;