ORDER
P.S. Bajaj, Member (J)
1. In this appeal, the Revenue has questioned the validity of the impugned order-in-appeal vide which the Commissioner (Appeals) has set aside the penalty imposed under Rules 13(2) of the CENVAT Rules on the respondents.
2. The learned JDR has contended that the penalty under the said Rule could not be set aside and as such, the impugned order is invalid. On the other hand, the learned Counsel has reiterated the correctness of the impugned order.
3. I have been both sides and gone through the record. The perusal of the record show that on conducting physical checking of the finished goods and inputs lying in the factory premised of the respondents by the Central Excise authorities, some shortage of the inputs was found. But they deposited the duty amount in respect thereof much before the issuance of the show cause notice. The adjudicating authority however still confirmed the duty demand with equal amount of penalty as detailed in the order-in-original. but in my view, the Commissioner (Appeals) has rightly set aside the penalty by following the ratio of the law laid down in Karnal Agricultural Industries Vs. CCE 2002 (53) RLT 921 wherein it has been rules that where the duty amount has been paid before the issuance of show cause notice, no penalty is levaible Therefore, the view taken by the Commissioner (Appeals) does not suffer from any legal infirmity and as such is upheld. The appeal of the Revenue is dismissed.