(1.) HEARD both sides. The revenue filed this appeal against the impugned order whereby penalty imposed under Section 11 -AC was set aside. The contention of revenue is that appellant had wrongly availed the benefit of small scale exemption, therefore, they are liable to penalty under Section 11 -AC of Central Excise Act.
(2.) THE brief facts of the case are that the appellants are working under the small scale exemption notification. For the year 2002 -2003, the appellant had shown the value of clearances as Rs. 2,97,75,485/ -. As per the revenue, the appellant had not included the value of clearance of Rs. 5,81,732/ - which was subsequently returned by the customers. On this ground, the revenue is of the opinion that for the subsequent year, i.e. 2003 -2004, the appellants are not eligible for small scale exemption notification as the clearance for the previous year were more than Rs. 3 crores.
(3.) THE appellants paid the duty immediately before issuance of show cause notice. Thereafter, show cause notice was issued for confirming the demand and imposition of penalty. The adjudicating authority confirmed the demand and imposed penalty under Section 11AC of Central Excise Act. The appellants filed appeal and the Commissioner (Appeals) set aside the penalty imposed under Section 11AC. The revenue filed this appeal challenging the impugned order on the ground that as the appellant has wrongly availed the benefit of small scale exemption notification, they are liable for penalty under Section 11AC of the Act.