CC AND CE Vs. BEEKAY ENTERPRISES

JUDGEMENT

(1.) THIS appeal by the Revenue is directed against the Order -in -Appeal of the Commissioner, Customs & Central Excise dated 10.10.2006 dismissing the Revenue's appeal directed against the Order -in -Original of the Assistant Commissioner dated 25.5.2005 declining to impose penalty on the respondent.

(2.) THE appeal is thus limited to non -imposition of penalty. It may be mentioned here itself that penalty was not imposed on the premise that the respondent -assessee had paid the entire duty prior to issuance of the show cause notice. While affirming the order of the Assistant Commissioner, the learned Commissioner placed reliance on the Larger Bench decision of the Tribunal in Machino Montel (I) Ltd. . He noticed that the decision of the Tribunal in the case of Rashtriya Ispat Nigam Limited v. CCE on the issue of imposition of penalty where entire duty stands paid prior to issuance of show cause notice, was upheld by the Supreme Court by summarily dismissing the appeal of the Department vide 2004 (63) ELT A53 (SC).

(3.) ON behalf of the respondent it was submitted that the appeal itself is not maintainable in view of the provisions of Sub -section (2) of Section 35B of the Act. Counsel submitted that appeal can be filed only on the direction of Committee of Commissioners of Central Excise upon review of the impugned order but no such direction has been brought on record. On merit Counsel submitted that the provision of Section 11AC can be applied only in cases of non payment or short payment duty by reason of fraud, collusion, wilful mis -statement or suppression of facts or contravention of any of the provisions with intent to evade payment of duty. In the instant case, there was no such allegation in the show cause notice as to any contravention with intent to evade payment of duty. The basic condition not being satisfied the authorities rightly declined to impose a penalty particularly when the respondent already paid entire duty before issuance of show cause notice. It was submitted that notwithstanding the decision in the case of Machino Montel (I) Ltd., it was held by the same High Court in Commissioner of Central Excise, Jalandhar v. S.K. Sacks (P) Ltd. , that where duty was paid before issuance of show cause notice, penalty was not imposable.