COMMISSIONER, CENTRAL EXCISE Vs. AAR KAY INDUSTRIES

JUDGEMENT

(1.) THIS appeal has been preferred by the revenue under Section 35G of the Central Excise Act, 1944, against order dated 23.9.2009 passed by the Customs, Excise & Service Tax Appellate Tribunal, New Delhi, claiming following substantial questions of law:

(2.) THE Assessee is manufacture of Joist/Girders/TMT Bars falling under Chapter 72 of the schedule of Central Excise Tariff Act, 1985. Search was conducted on the premises of the Assessee and shortage of stock was found. After issuing show cause notice, the adjudicating authority passed order -in -original raising demand of duty and also imposed penalty of Rs. 1.75 lacs under Rule 25 of the Central Excise Rules, 2002. The Commissioner (Appeals) confirmed order -in -appeal but on further appeal, the Tribunal set aside the levy of penalty having regard to the fact that the payment had already been made in terms of Section 11A(2B).

(3.) LEARNED Counsel for the Appellant submits that mere making of payment was not enough to waive penalty in view of Explanation I where duty was not levied or was not paid or was short levied or was short paid or was erroneously refunded by reasons of fraud, collusion or any wilful mis -statement or suppression of facts, or contravention of law, and with a intent to evade payment of duty. In such situations, penalty could still be levied. Reliance has also been placed on judgment of the Hon'ble Supreme Court in Union of India v. Rajasthan Spinning & Weaving Mills : (2009) 13 SCC 448.