CCE Vs. HICKS THERMOMETERS (I) LTD.

JUDGEMENT

(1.) THIS is the appeal by the Revenue against order -in -appeal No. 43 -CE/LKO/07 dated 26/04/07 passed by CCE (Appeals), Lucknow by which the Commissioner (Appeals) while confirming the duty demand against the respondent set aside imposition of penalty under Section 11AC.

(2.) NONE appeared for the respondent. Heard the learned Departmental Representative, Shri S.N. Srivastava, who pleaded that the respondent are manufacturer of thermometers and that in course of stock taking and scrutiny of their accounts by a team of Preventive Officers on 15/03/05, it was found that they had not paid duty on the value of thermometers supplied to the customers as free replacement/free gifts and the duty chargeable on these goods was Rs. 25,290/ -, that the appellant paid the duty immediately, that thereafter proceedings for confirmation of the duty demand alongwith interest and penalty were initiated and the Assistant Commissioner, while confirming the duty demand alongwith interest imposed penalty of equal amount on the respondent under Section 11AC, that the Commissioner (Appeals) has wrongly set aside the penalty just on the ground that the duty and the interest had been deposited prior to the issue of the show cause notice, that from the records it does not appear that the interest had also been paid prior to the issue of show cause notice and that the Commissioner (Appeals)'s reliance on the Karnataka High Court's judgment in the case of Shri Krishna Pipe Industries reported in, 2004 (165) E.L.T. 507 and Mumbai High Court's judgment in the case of Gauram Mercantile Ltd. reported in : 2005 (190) E.L.T. 11 (Bom.) is not correct as in view of Hon'ble Punjab & Haryana High Court's judgment in the case of CCE, Delhi - III v. Machino Montell (I) Ltd. reported in : 2006 (202) E.L.T. 398 (P&H) it is now a settled law that if the elements of Section 11AC are present, the penalty has to be imposed even if the duty and interest had been paid prior to the issue of show cause notice.