Case Law Details
Micky Metals Limited Vs Commissioner of CGST & Excise (CESTAT Kolkata)
In the show cause notice dated 10-06-2016, except for stating that the assessee has contravened the provisions of the Rules, there is no specific allegation so as to hold the assessee guilty of having committed fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. The authority is bound to record a prima facie finding that there was an intent to evade payment of duty by suppressing the material facts or by making wilful misstatement or by committing fraud or collusion. Thus, in the absence of any such specific allegation in the show cause notice, the authority cannot mechanically impose penalty under Section 11AC of the Act. The provisions of Section 11AC of the Act are attracted in the event of establishing fraud, collusion or suppression of facts or made any wilful misstatement with an intent to evade payment of duty. This has not been done in the present case.
In view of the above, the penalty is set aside.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The Ld. Advocate appearing on behalf of the appellants, submits that subsequent to audit observation, it was noticed that the Appellant had stock transferred their finished goods to depot at Gaziabad Branch after paying Central Excise duty at factory gate and subsequently sold the same from the depot at Gaziabad Branch. Audit observed that the assessee had adopted the valuation in respect of their finished goods cleared to depot at Gaziabad Branch on the basis of transaction value under Section 4 (1)(a) of the Central Excise Act, 1944 instead of Rule 7 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 as amended.
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