CCE Vs. ISEX FASHIONS PVT. LTD.

JUDGEMENT

(1.) M /s. ISEX Fashions Pvt. Ltd. cleared for sale in domestic tariff area rejected garments bearing the brand name of another person without payment of applicable duty of excise during the period April 2001 to August 2001. Following the visit of the officers of the department to the premises of the respondent, a notice was issued to them proposing to demand duty due on the goods cleared and to impose penalty for the contravention of various statutory provisions involved in the clearances without payment of duty. Concluding the adjudication proceedings, the Asst. Commissioner found that the respondent had already paid Rs. 3,33,730/ - as against an amount of Rs. 3,68,802/ - found to be due from the respondent. Therefore, the respondent was yet to pay the balance amount of Rs. 30,072/ -. Following he ratio of the ratio of the decision of the Tribunal's Larger Bench in CCE v. Machino Montell (I) Ltd. v. CCE , the original authority refrained from imposing equal amount of penalty and demanding interest under Section 11AB in respect of the duty due of Rs. 3,33,730/ - which the appellant had paid before issue of the show -cause notice. He confirmed the demand of balance amount of Rs. 30,072/ -, demanded appropriate interest due thereon and imposed equal amount of penalty under Section 11AC. A penalty of Rs. 5000/ - was also imposed under Rule 173Q of the Central Excise Rules, 1944. In the impugned order, the Commissioner (Appeals) upheld the order of the original authority.

(2.) IN this appeal of the Revenue, ld. SDR submits that waiver of equal amount at of penalty under Section 11AC could have been ordered only in cases where the assessee voluntarily made good the non -payment or short payment. In the instant case, the respondent had paid the duty not paid only on detection of the evasion by the departmental officers. Therefore, the orders of the lower authorities were incorrect to the extent of not imposing penalty equal to the total duty not paid and in not demanding interest on the said amount.

(3.) I have carefully considered the facts of the case and the submissions made by both sides. The lower authorities found that the respondents had not paid the duty due on the impugned clearances owing to their bonafide belief that those goods were exempt. They had also followed the ratio of the decision of the Larger Bench of the Tribunal in Machine Montell (I) Ltd. (supra) in not imposing equal amount of penalty and not demanding interest due on the said amount paid before issue of SCN. No case law has been furnished to show that the ratio of the above decision has been unsettled. As a matter of fact, from the finding of the original authority, the respondents were forced to pay a higher amount of duty than what was actually due as that authority did not allow relief admissible to the respondent considering the sale price excluding sales tax as cum -duty -value. However, the assessee has not filed any appeal against the impugned order. In the circumstances, I do not find that the impugned order calls for any interference. Accordingly, the impugned order is sustained and the appeal filed by the Revenue is dismissed.