GUPTA TOBACCO COMPANY Vs. CCE

JUDGEMENT

(1.) THIS appeal is listed for hearing on the direction of the Hon'ble High Court of Punjab and Haryana at Chandigarh in Central Excise Appeal No. 12 of 2005 decided on 31/07/06. The Hon'ble High Court has directed the Tribunal as under:

(2.) THE relevant fact that arise for consideration are the appellants were manufacturers of Tobacco and were registered under the Central Excise Act. The officers of the Anti Evasion visited the appellant's factory on 08/06/2001, on the physical stock checking, it was noticed that there was a shortage of finished goods. The appellant deposited the entire amount of Central Excise duty involved on such shortage before the issuance of show cause notice. Show cause notice was issued to the appellant for the appropriation of the amount of the duty paid and for imposition of penalty. The adjudicating authority appropriated amount of the duty paid by the appellant against the demand confirmed and also imposed equivalent penalty under Section 11AC and under Rule 173Q/25 of the Central Excise Rules. On an appeal, Commissioner (Appeals) set aside the penalty imposed under Rule 173Q/25 of the Central Excise Rules but upheld the penalty imposed under Section 11AC. On an appeal the Tribunal vide its order dated 28/04/04 set aside the penalty imposed on appellant on the ground that the appellants had already deposited the entire amount of the duty before the issuance of show cause notice.

(3.) LEARNED advocate appearing on behalf of the appellants submits that the question of imposition of penalty under Section 11AC, when the entire amount of the duty is deposited before the issuance of show cause notice is settled by the Hon'ble High Court of Karnataka in the case of CCE, Mangalore v. Shree Krishna Pipe Industries as reported at . It is his submission that the appellant had deposited the entire amount of the duty before the issuance of show cause notice is undisputed.