COMMISSIONER OF CENTRAL EXCISE Vs. GARG INDUSTRIES

JUDGEMENT

(1.) THIS appeal filed by the revenue under Section 35G of the Central Excise Act, 1944 ('the Act') challenges order dated 27 -7 -2005, passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi ('the Tribunal'). The Tribunal in the aforementioned order has taken the view that the amount of penalty under Section 11AC of the Central Excise Act, 1944 ('the Act') could be dropped in the peculiar facts and circumstances of the case and accordingly, upheld the order passed by the Commissioner (Appeals). The Tribunal has also opined by placing reliance on its Larger Bench judgment in the case of CCE v. Machino Montell (I) Ltd. : 2004 (168) ELT 466 (Delhi Trib.), holding that where the duty has been deposited by the dealer -assessee before issuance of show -cause notice by the revenue then neither penalty could be imposed nor any interest could be demanded. Accordingly, the revenue has claimed by filing these appeals under Section 35G of the Act that the following substantive question of law would arise for determination of this Court:

(2.) BRIEF facts of the case are that the dealer -assessee is engaged in the manufacture of wire rods in coils, rounds, squares, bars and RCS of Alloy/Non -Alloy Steel falling under Chapter 72 of the Central Excise Tariff Act, 1985. On 16 -8 -2003, the Prevention Staff of the revenue intercepted one tempo and one truck loaded with steel wire rods. The driver of the tempo furnished the documents such as invoice, GR and weighment slip which were issued by M/s. Ganesh Trading Company, Village Garhi Tarkhana, Machhiwara, for 12,000 MT of steel wire rods. It was disclosed that the goods were loaded on 15 -8 -2003 from the factory premises of M/s. Garg Industries -respondent and the same were to be delivered to M/s. Pullman Sales Corpn. at Ludhiana. Similarly, the driver of the truck also produced documents regarding 12,175 MT of steel wire rods and the goods were to be delivered at the premises of M/s. Makker Wire, Ludhiana. For the purposes of verification and scrutiny of the documents, the factory premises of the dealer -assessee was visited where Shri Balraj Garg, Director and Shri Avtar Singh, authorised signatory were present.

(3.) ON 17 -8 -2003, the dealer -assessee deposited a sum of Rs. 2,19,644 on account of the shortage and clandestine removal of goods from the factory premises. On 10 -2 -2004, a show -cause notice was issued to the dealer -assessee on various counts.