COMMISSIONER OF CENTRAL EXCISE Vs. CONCEPT PHARMACEUTICALS

JUDGEMENT

(1.) IN this appeal filed by the department, there are two issues arising for consideration:

(2.) THE respondent had removed certain inputs on which CENVAT Credit had been availed, by reversing the credit during the period 6.7.2000 to 15.5.2001. The departmental authorities required them to ensure that appropriate duty be paid on the inputs at normal tariff rate of duty on the assessable value determined under Section 4(1)(a) of the Central Excise Act, 1944. The party accordingly determined the assessable value and found that the amount of CENVAT Credit reversed by them earlier was not enough. Therefore, they paid the differential amount of duty in June 2001 amounting to Rs. 2,19,208/ -. A show -cause notice was issued by the department on 15.9.2004 proposing (a) to appropriate the above payment towards demand of duty on the goods under Section 11A of the Central Excise Act, 1944; (b) to levy interest thereon under Section 11AB of the Act; and (c) to impose penalty on the noticee under Section 11AC of the Act. These proposals were contested. The original authority dropped the proposal for interest under Section 11AB and for penalty under Section 11AC, against which the department preferred an appeal to the Commissioner (Appeals). The appellate authority dismissed the department's appeal on merits. It took the view that, where the amount of duty was paid before the issue of show -cause notice, Sections 11AB and 11AC were not invokable. The present appeal of the Revenue is against this decision of the Commissioner (Appeals).

(3.) THE learned Counsel for the respondent has relied on Kaur & Singh v. Collector of Central Excise, 1997 (94) ELT 289 (SC) in support of his submission that, as the show -cause notice did not allege fraud, collusion etc, it was not open to the department to insist on payment of penalty under Section 11AC. The learned Counsel has also sought to defend the Appellate Commissioner's decision on the relevant issues.