CCE Vs. ARCEE ISPAT UDYOG LTD.

JUDGEMENT

(1.) HEARD the learned D.R. on behalf of the appellant. None appeared on behalf of the respondent in spite of issue of notice and there is no application for adjournment.

(2.) IN this case, on 2.2.98 the central excise officers visited the factory of the respondent when they detected shortage of finished goods. The respondent after 3 days of the detection of shortage paid entire amount of duty of Rs. 99,227/ -. A show cause notice dated 3.7.98 was issued proposing demand of duty of Rs. 99,227/ - and imposition of penalty under Rule 9(2) and 173Q of the erstwhile Central Excise Rules, 1944 for contravention of the provisions of Rules. By the adjudication order dated 7.5.99, the Assistant Commissioner of Central Excise confirmed the demand of duty and appropriated the said amount against the deposit made by the respondent. He also imposed penalty of Rs. 10,000/ - under Rule 9(2) and 173Q of the Rules, 1944. The respondent filed appeal before the Commissioner (Appeals) wherein the Commissioner (Appeals) set aside the penalty on the ground that duty was paid much before the issue of show cause notice. The Commissioner (Appeals) followed the decision of the Larger Bench of the Tribunal in the case of CCE, Delhi -III v. Machino Montell (I) Ltd. 2004 (62) RLT 709 (CESTAT -LB).

(3.) AFTER considering the (sic) learned D.R. and on perusal of the record, I find force in the submission of the learned D.R. In this case, penalty was proposed under Rule 9(2) and Rule 173Q of the Central Excise Rules, 1944. The adjudicating authority imposed penalty under the said provisions but the Commissioner (Appeals) proceeded on the basis of Section 11AC and followed the decision of the larger bench which was over ruled by the Hon'ble Punjab and Haryana High Court. As such, the impugned order in so far as setting aside of the penalty, is hereby quashed and the adjudication order is upheld.