CCE Vs. MAITRI STEELS LTD.

JUDGEMENT

(1.) THIS is an appeal by the Revenue against Commissioner (Appeals) order dated 23/03/07 by which the Commissioner (Appeals) while upholding the duty against the Respondent, set aside the order of penalty imposed on them under Section 11AC of the Central Excise Act. The Appellant are a manufacturer of M.S. Strips and CRF Sections. Their factory was visited by the Jurisdictional Central Excise Officers on 09/09/05, in course of which the stock of the finished goods was checked and shortage of 12.070 M.T. of M.S. strips and 10.665 CRF Sections involving duty of Rs. 69,968/ - was detected. The duty was paid by the Appellant. Subsequently the show cause notice was issued for confirmation of the duty demand and imposition of penalty on them under Section 11AC. The Deputy Commissioner vide order -in -original dated 12/01/07 confirmed the duty demand and appropriate an amount of Rs. 71,368/ - already paid by the Respondent towards this demand. He also imposed a penalty of Rs. 71,368/ - on the respondent under Section 11AC. On appeal filed by the Respondent against this order, the Commissioner (Appeals) vide the impugned order -in -appeal dated 23/03/07 while upholding the duty demand set aside the penalty imposed on the Respondent under Section 11AC on the ground that entire duty has been paid by the Respondent even prior to the issue of show cause notice. In this regard, the Commissioner (Appeals) relied upon:

(2.) NONE appeared for the Respondent. Heard Shri S. Gautam, the learned Departmental Representative who pleaded that the Tribunal's judgment in the case of Machino Montell (I) Ltd. is no longer a good law as the same has been reversed by Hon'ble Punjab & Haryana High Court vide judgment reported in . He also emphasized that in this case, the Respondent had clearly admitted that the goods found short had been removed without payment of duty and thus admittedly, this is a case of clandestine removal, therefore, the Section 11AC would be attracted and just because the duty had been paid prior to the issue of show cause notice, the penalty under Section 11AC cannot be waived.