No penalty as job worker paid less duty due to non-supply of costing data by Principal

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Section 122 of the Central Goods and Services Tax Act, 2017/Section 11AC of the Central Excise Act, 1944 – Penalties/confiscation – Period January, 2004 to December, 2004Assessee was engaged in manufacture of goods on job work basis out of raw and packing material supplied by principal ‘C’ – It made short payment of duty due to non supply of costing data by principal ‘C’ – Thereafter assessee realised said mistake and suo motu paid amount along with interest – Adjudicating Authority imposed penalty upon assessee under section 11AC –

Whether in eyes of Central Excise law job worker is sole manufacturer and it is bound to comply with all provisions of central excise including valuation – Held, Yes – Whether, therefore, imposition of penalty upon assessee under section 11AC was justified – Held, Yes – Whether penalty amount deserved to be reduced to 25 per cent in terms of proviso to section 11AC – Held, Yes.

Citation: [2018] 92 taxmann.com 3 (Mumbai – CESTAT)