N.P.GUPTA, J. - (1.) THIS appeal has been filed by the assessee against the impugned judgment of the learned Tribunal dt. 15.4.2004. The appeal was admitted on 24.5.2005, by framing the following substantial questions of law: (i) Whether any discretion vests on the authorities under the Central Excise Act in quantifying the penalty imposable under Section 11AC of the Central Excise Act, 1944? (ii) Whether in appeal filed by the Revenue against the order of the Commissioner of Central Excise (Appeals) setting aside the penalty levied against the assessee, the Tribunal was justified in not entertaining the plea of the assessee that in case appeal is allowed, the quantum of penalty may be reduced, on the ground that no cross -examination has been filed? (iii) Whether mens rea in any form is part of consideration before penalty under Section 11AC can be imposed?
(2.) WE have heard learned Counsel for the parties. The skeleton facts are, that on 5.10.2001, during course of transit check, vehicle No. RJ 1G -4585 was intercepted, and on checking it was found that it was carrying 20 bags (585 Kgs) chewing tobacco (Natraj Brand) registered under the name and brand, being product of the assessee, was not carrying the necessary invoice. Thereupon the factory was visited, invoices were checked, and then, on 1.4.2002 show cause notice was issued to the assessee. The learned Additional Commissioner after completing all necessary proceedings passed the order dt. 25.6.2002, imposing the penalties mentioned therein. Against that order an appeal was filed, which was partly allowed by the learned Commissioner (Appeals), and the penalty imposed under Section 11AC, being penalty equal to duty, was set aside, on the ground, that mens -rea to evade duty was conspicuously absent. For that the learned Commissioner relied upon certain facts and circumstances. Against this order the Department filed appeal before the learned Tribunal, and the learned Tribunal allowed the same, finding, that the plea of the assessee, that the slip was left by the proprietor of the respondent firm with the Munshi, to issue the excise invoice, but the Munshi did not issue the same, being unfounded, and unappealable to reason, therefore, the order was set aside.
(3.) ARGUING the appeal, learned Counsel for the assessee relied upon two judgments of this Court; one being in D.B. Central Excise Appeal No. 16/06 Union of India v. T.P.L. Industries Ltd. and Ors. decided on 2.3.2007, which judgment was followed in another D.B. Central Excise Appeal No. 41/2006 Union of India v. Perfect Thread Mills Ltd. decided on 10.8.2007, and contended, that in view of the provisions of Section 11AC(2b), since the assessee had deposited the requisite duty, even before issuance of show cause notice, no penalty under Section 11AC could be imposed, and therefore, the impugned order of the learned Tribunal is liable to be set aside.;