Whether penalty and interest can be levied if Excise duty has been paid before issue of Show Cause Notice

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CCE Vs. M/s. Plaxair India Pvt. Ltd. (Supreme Court) -

In the present case, it is the stand of the assessee that the assessee had paid the duty under the provisions of the Act before the issue of the Show Cause Notice and, therefore, not liable for the payment of penalty and interest on the duty so paid under Section 11 AC of the Central Excise Act, 1944.

Mr. R.P. Bhatt, learned counsel appearing for the Revenue, would submit that the issue raised in this appeal is now squarely covered by the decision of this Court in Union of India Vs. Dharmendra Textile Processors & Ors., (2008) 13 SCC p.369 and, therefore, submits that the judgment and orders passed by the Tribunal requires to be annulled by this Court. Per contra, learned counsel appearing for the assessee would submit that though the issue is now covered by the decision of this Court in the case of Dharmendra Textile Processors (supra), the matter requires to be remitted to the Tribunal for fresh consideration and decision.

In view of the above, we are left with no other alternative but to set aside the orders passed by the Tribunal in Appeal No.E/711/03 dated 16.8.2005 and remit the matter to the Tribunal for its fresh consideration and decision.