Court affirms reduction of penalty despite late payment under Central Excise Act

The Court upheld the Customs, Excise and Service Tax Appellate Tribunal's decision to reduce the penalty imposed on M/s Shipley Hosiery Industries to 25% of the duty amount, despite the penalty not being paid within 30 days as required by Section 11 AC of the Central Excise Act, 1944. The Court cited previous cases and affirmed the Tribunal's ruling, dismissing the Revenue's appeal. The decision emphasized consistency in applying penalty provisions and interpreting duty payment timelines under Section 11 AC.

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Issues involved: Appeal challenging order of Customs, Excise and Service Tax Appellate Tribunal u/s 35 G of Central Excise Act, 1944 regarding penalty imposition and benefit eligibility u/s 11 AC.

Summary:
The Revenue filed an appeal challenging the Tribunal's order allowing penalty reduction to 25% of duty amount even when penalty was not paid within 30 days as required by the second proviso to Section 11 AC. The case involved M/s Shipley Hosiery Industries, a manufacturer of Sweaters, where a duty amounting to Rs. 1,98,068/- was found due. The Adjudicating Authority confirmed the demand and imposed a penalty of Rs. 1,98,068/-. The Commissioner (Appeals) upheld the order, leading to an appeal before the Tribunal. The Tribunal reduced the penalty to 25% citing precedent cases. The Revenue contended that the penalty should be equal to the duty amount as per Section 11 AC, while the Respondent argued that the penalty should be 25% of the duty determined if paid within 30 days. The Court noted that similar issues were addressed in previous cases like CCE vs. J.R. Fabrics (P) Ltd. and upheld the Tribunal's decision, dismissing the Revenue's appeal.

The Court held that the case was in line with previous decisions and dismissed the Revenue's appeal, as no contrary view was presented by the appellant's counsel. The decision was based on the interpretation of Section 11 AC and the application of penalty provisions in relation to duty payment timelines. The Court referred to relevant legal precedents to support its ruling, emphasizing consistency in the application of penalty provisions in similar cases.

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