2005 (98) ECC 367 (Tri)

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL

New Delhi -- Bench-NB(A)

Shri S.S. Kang, Vice President and Shri C.N.B. Nair, Member (T)

Maruti Udyog Ltd.

Versus

CCE, Delhi-III

Appeal No. E/2180/04/NB-A

[Arising out of Order-in-Appeal No. 67/AKG/GGN/2004 dated 3.2.2004 passed by the Commissioner of Central Excise (Appeals), Gurgaon.]

Final Order No. 1441/04-NB(A), dated 14.12.04, Certified on 27.12.2004

Penalty (Excise)

Duty paid before issuance of Show Cause Notice -- Penalty under Section 11AC and interest under Section 11AB of Central Excise Act cannot be demanded in a case where duty has been paid prior to issuance of show-cause notice.

[Para 4]

Appeal allowed

PRESENT :

Shri B.L. Narasimhan, Adv. for the appellant.

Shri S.C. Pushkarna, JDR for the respondent.

Cases Cited :

1. CCE v. Machino Montell (I) Ltd., 2004 (96) ECC 180 (LB) (Followed)........... [Paras 2 & 4]

2. CCE, Mangalore v. Shree Krishna Pipe Indus., 2004 (93) ECC 477.................... [Para 4]

3. Pee Aar Steels (P) Ltd. v. CCE, 2004 (93) ECC 633 (All.).................................. [Para 3]

4. Rashtriya Ispat Nigam Ltd. v. CCE, 2002 (54) RLT 317..................................... [Para 4]

Per : S.S. Kang

Heard both sides.

2. The appellant filed this appeal against Order-in-Appeal passed by Commissioner (Appeals). The appellants are not challenging the confirmation of duty. The appellants are only challenged the imposition of penalty under section 11AC and interest under Section 11AB of Central Excise Act on the ground that whole of the duty has been paid prior to issuance of show-cause notice. The appellant relied upon the Larger Bench decision of the Tribunal in the case of CCE v. Machino Montell (I) Ltd., 2004 (96) ECC 180 (LB) : 2004 (62) RLT 709.

3. The contention of the Revenue in the case of Pee Aar Steels (P) Ltd. v. CCE, 2004 (93) ECC 633 (All.), the Hon'ble Allahabad High Court held that the imposition of penalty has nothing to do with the timing of show-cause notice.

4. We find that the only issue in this appeal is whether the penalty under Section 11AC and interest under Section 11AB of Central Excise Act can be demanded in a case where duty has been paid prior to issuance of show-cause notice. We find that the Larger Bench of the Tribunal in the case of Machino Montell (I) Ltd. (supra) after considering the decision of the Tribunal in Rashtriya Ispat Nigam Ltd. v. CCE, 2002 (54) RLT 317 against which the appeal filed by the Revenue was dismissed by Hon'ble Supreme Court and the decision of this Tribunal in Karnataka High Court in the case of CCE, Mangalore v. Shree Krishna Pipe Industries, 2004 (93) ECC 477 : 2004 (61) RLT 17 where the particular matter on this issue is answered in favour of the assessee by the Hon'ble High Court. In view of the above decision of the Hon'ble Supreme Court in the case of Rashtriya Ispat Nigam Ltd., we respectfully followed the ratio of the law laid down in the Larger Bench of the Tribunal in the case of Machino Montell (I) Ltd. (supra). The appellant had deposited whole of the duty prior to issuance of show-cause notice, therefore, the imposition of penalty and interest is not sustainable and is set aside. The appeal is allowed as indicated above.