CCE Vs. DEEPAK SPINNERS LTD.

JUDGEMENT

(1.) IN this appeal, the Revenue has challenged a part of the impugned Order -in -Appeal vide which the Commissioner (Appeals) has set aside the penalty and interest as imposed by the adjudicating authority on the respondents, while confirming the duty demand.

(2.) NONE has come present on behalf of the respondents. They have filed their written submissions. We have heard both sides and gone through the record. The facts made out from the record are : The respondents are manufacturer of man -made yarn. They availed the modvat credit facility under Rule 57 -A of the Rules and cleared the yarn to M/s. Punjab State Handloom Weavers Apex Co -operative Society Ltd., Chandigarh, without payment of duty. But they were served with a show cause notice of having violated the condition No. 17 of the Notification No. 5/98 dated 2.6.1998 under which they claimed exemption from payment of duty for having not obtained certificate as required under said condition before clearing the goods. The adjudicating authority confirmed the duty demand in all of Rs. 1,12,392 with equal amount of penalty under Section 11 -AC read with Rule 173 -Q payable with interest. The learned Commissioner (Appeals) has upheld the duty, but set aside the penalty and the interest on the ground that the duty was deposited by the respondents before the issuance of the show cause notice.

(3.) THEREFORE , the issue which falls for our consideration is, as to whether the penalty and interest could be set aside by the Commissioner (Appeals) on the simple ground that the duty was deposited by the respondents before the issuance of the show cause notice or not, The respondents have in the written submissions placed reliance on three judgments of the Tribunal and one of the Apex Court to justify the order of the Commissioner (Appeals) in this regard. The judgments referred to by them are as under: