2009 (7) TMI 1024 - AT - Central Excise

Tribunal adjusts penalty based on timely payment, citing Section 11AC; assessee granted reduced penalty option

The Tribunal remanded the case for a fresh decision on the penalty amount, following the Supreme Court's ruling in Union of India v. Dharmendra Textile ... - Issues: The judgment involves the remand by the Hon'ble High Court for fresh decision on the quantum of penalty, application of Section 11AC, and the interpretation of Provisos to Section 11AC.Quantum of Penalty: The matter was remanded for fresh decision on the quantum of penalty following the Hon'ble Supreme Court's judgment in the case of Union of India v. Dharmendra Textile Processors. The Revenue appealed against the dropping of proceedings by the Assistant Commissioner, which were later confirmed by the Commissioner (Appeals) imposing a penalty of Rs. 1,00,000 u/s 11AC. The Tribunal increased the penalty to the amount of duties, i.e., Rs. 3,22,907, as per the Supreme Court's ruling.Provisos to Section 11AC: The Tribunal noted the Provisos to Section 11AC, which allow for a reduced penalty if duty and interest are paid within thirty days. The appellate authority failed to provide the option to the assessee to deposit the dues along with 25% of penalty within the specified period. Citing precedents, the Tribunal held that the fault lay with the authorities for not giving the option to the assessee, thus offering the assessee the opportunity to deposit the entire dues along with 25% of penalty within thirty days to restrict the penalty to 25% of the duty amount.In conclusion, the Tribunal enhanced the penalty equal to the confirmed duty but provided the assessee with the option to pay the entire dues along with 25% of penalty within thirty days to limit the penalty to 25% of the duty amount, in line with the Provisos to Section 11AC and relevant court judgments.