Duty determination by quantification can trigger penalty review under Section 11AC even without express citation of Section 11A(2).

Duty quantified and confirmed by the adjudicating authority may amount to determination under Section 11A(2) of the Central Excise Act, 1944 even if the operative order does not expressly cite that provision. On that basis, the view that no duty had been determined under Section 11A(2) was incorrect, and the applicability of penalty under Section 11AC had to be examined afresh. The matter was remitted for reconsideration of penalty in light of the duty determination.

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Issues: Whether the original authority had determined duty under Section 11A(2) of the Central Excise Act, 1944 so as to sustain consideration of penalty under Section 11AC of the Central Excise Act, 1944.

Analysis: The show cause notice demanded duty not paid, which was referable to Section 11A(1) of the Central Excise Act, 1944. The original authority quantified and confirmed the duty liability and, though it did not expressly cite Section 11A in the operative portion, its function was one of determining duty under Section 11A(2). The lower appellate authority erred in treating the case as one where no duty had been determined under Section 11A(2), and the applicability of Section 11AC had to be examined on that basis.

Conclusion: The finding that no duty was determined under Section 11A(2) was held to be factually incorrect, and the matter was remitted for fresh decision on penalty under Section 11AC.

Ratio Decidendi: Where the adjudicating authority has quantified duty liability pursuant to a demand notice, such determination may amount to duty determination under Section 11A(2) even if the provision is not expressly cited in the operative order, requiring reconsideration of penalty under Section 11AC.

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