High Court held set aside the Tribunal’s order and restored the penalty

1. The revenue received intelligence that the M/s Prabhat Zarda Factory (I) Pvt Ltd was engaged in manufacture and clearance of "Raj Ratan Qiwam" without requisite registration.

2. Consequently, the clandestinely manufactured goods were seized.

3. A show cause notice was issued calling upon the noticees to show cause as to why seized goods ought not to be confiscated, and central excise duty as well as penalty ought not be imposed.

4. CCE confirmed the demand and ordered confiscation of the goods seized, and imposed penalty.

5. Commissioner (Appeals) dismissed the appeal of the respondent.

6. CESTAT while confirming the demand held that as the respondent had paid the duty before issuance of the show cause notice, penalty was not leviable

On appeal, the High Court held as under:

7. A bare perusal of the dates and events recorded hereinabove would show that duty demanded was paid after the raid but before the issuance of the show cause notice.

8. the contention of the revenue will have to be sustained that penalty equivalent to the duty demanded ought to have been imposed on the respondent.

9. Accordingly, the appeal is allowed and the impugned judgment of the Tribunal on the aspect of penalty is set aside.

Case Reference - Commissioner Of Central Excise, ... vs M/S Prabhat Zarda Factory (I) Pvt.

Delhi High Court