At, High Court of Judicature at Madras
By, THE HONOURABLE MR. JUSTICE R. SUDHAKAR & THE HONOURABLE MR. JUSTICE G.M. AKBAR ALI
For the Petitioner: E. Vijay Anand, Standing Counsel. For the Respondents: R1, No appearance.
R. Sudhakar, J.
1. This Civil Miscellaneous Appeal has been filed against the Final Order No.480 of 2007 dated 04.05.2007 on the file of the CESTAT. This Court, by order dated, 06.12.2007 admitted this appeal on the following substantial question of law:
"Whether the Tribunal is right in setting aside the mandatory equal amount of penalty that was rightly imposed by the lower appellate forum under section 11AC on a proven ground that the respondents had clandestinely cleared excisable goods?"
2. On a perusal of the order of the Tribunal, it is seen that the issue raised in this appeal relates to levy of penalty under Section 11AC of the Central Excise Act. After dispensing with the pre-deposit, the Tribunal disposed of the appeal filed by the assessee at the admission stage itself by relying on the decision reported in 2003 (161) E.L.T. 285 (Rashtriya Ispat Nigam Ltd. V. Commissioner of Central Excise, Visakhapatnam), as affirmed by the Apex Court reported in 2004 (163) E.L.T.A.53 (S.C.) on the ground that the duty was paid by the assessee prior to the issuance of show cause notice. Aggrieved by the said order of the Tribunal, the Revenue has filed the present appeal.
3. The Supreme Court in the case of Union of India V. Rajasthan Spinning and Weaving Mills reported in JT 2009 (7) SC 314 = 2009 (238) E.L.T. 3 (S.C.) has clearly held that mere payment of differential duty whether before or after the show cause notice would not alter the situation and they would be liable for penalty in case the conditions for imposing such penalty spelt out in Section 11 AC of the Act are attracted.
4. In view of the categorical statement of law by the Supreme Court in the above-stated decision reported in JT 2009 (7) SC 314 = 2009 (238) E.L.T. 3 (S.C.) (Union of India V. Rajasthan Spinning and Weaving Mills), the question of exonerating the assessee from payment of penalty does not arise. Hence, this appeal deserves to be allowed and the question of law has to be answered in favour of the Revenue and the question of law is answered in favour of the Revenue. However, th
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e assessee will be entitled to any other benefit in terms of the proviso to Section 11AC of the Central Excise Act. Accordingly, this Civil Miscellaneous Appeal stands allowed and the order of the Tribunal stands set aside. No costs.