Cross-objection requirement and Section 11AC penalty limits kept the existing penalty intact in appellate review.

A respondent seeking reduction of an adverse penalty in appellate proceedings must file the appropriate cross-objection or independent appeal; without that remedy, the Tribunal declined to entertain the request for complete reduction. Penalty under Section 11AC was also not treated as automatically payable at the maximum amount in every case, and the Tribunal found no basis to enhance the penalty to the duty evaded. The Commissioner (Appeals)' order was upheld and the Revenue's appeal was rejected, leaving the penalty undisturbed.

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Issues: (i) Whether the respondent could seek reduction of penalty without filing a cross-objection in the Revenue's appeal; (ii) whether penalty under Section 11AC could be enhanced to the amount of duty evaded.

Issue (i): Whether the respondent could seek reduction of penalty without filing a cross-objection in the Revenue's appeal.

Analysis: The respondent had not filed a cross-objection or an independent appeal against the penalty imposed by the lower authority. In an appellate proceeding, a party seeking reversal or modification of the operative part adverse to it must avail the prescribed procedural remedy. The Tribunal therefore declined to entertain the respondent's prayer for complete reduction of penalty on that basis.

Conclusion: The respondent was not entitled to seek reduction of penalty in the absence of a cross-objection.

Issue (ii): Whether penalty under Section 11AC could be enhanced to the amount of duty evaded.

Analysis: The Revenue contended that Section 11AC required penalty equal to the duty evaded. The Tribunal, however, relied on the Larger Bench view that penalty under Section 11AC is not invariably mandatory in the maximum amount, and found no reason to interfere with the penalty already imposed by the Commissioner (Appeals). On that basis, enhancement of penalty was rejected.

Conclusion: Penalty under Section 11AC was not enhanced and the Revenue's plea failed.

Final Conclusion: The order of the Commissioner (Appeals) was upheld and the Revenue's appeal was rejected, leaving the existing penalty undisturbed.

Ratio Decidendi: A party seeking alteration of an adverse part of an order in appellate proceedings must invoke the appropriate appellate remedy, and penalty under Section 11AC is not automatically required to be imposed at the maximum amount in every case.

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